Gauhati High Court Quashes ₹19.5 Crore GST Notice Against PepsiCo

In a judgment delivered on September 19, 2025, a single bench of Justice Soumitra Saikia observed that the SCN could not have been issued without providing PepsiCo an opportunity to explain its stance.

"Invocation of jurisdiction under Section 73, without mandatorily following the procedure prescribed under Section 61 read with Rule 61 of the Act, 2017, read with Rule 99 of the Rules, 2017, is contrary to the prescribed procedure and opposed to the very scheme of the Act. This Court holds that the revenue, through the proper officer, invoked its jurisdiction under Section 73 without due compliance with the procedure prescribed under Section 61; therefore, such invocation of jurisdiction is completely unauthorized, and consequently, all further actions taken thereunder must be held to be contrary to the provisions of law."

The SCN, dated September 5, 2023, alleged that PepsiCo had wrongly availed and utilized Input Tax Credit (ITC) amounting to ₹19,51,41,111 for the financial year 2017–18. The basis for the allegation was a claimed mismatch between ITC figures reported in Form GSTR-9C and expenses disclosed in audited financial statements, particularly in Table 14 of the form.

PepsiCo argued that filing details in Table 14 was not mandatory for that period, as clarified through multiple official notifications.

Senior Advocate R Shah, appearing for the petitioner, argued that the department had never issued a notice in Form GST ASMT-10, which is required under Section 61 read with Rule 99 before initiating any action under Section 73.

He submitted that without first issuing ASMT-10 and providing the taxpayer an opportunity to respond, the department could not validly proceed to raise a demand. He also pointed out that the limitation period for issuing an SCN under Section 73 for FY 2017–18 had lapsed on September 30, 2023.

The Court agreed with these arguments, stating, “where the statute itself prescribes a procedure enabling the registered taxpayer to rectify any defects, subject to such defects being brought to their notice as per the prescribed procedure, and if the explanation or rectification offered is found acceptable by the proper officer, there arises no occasion to invoke proceedings under Section 73, as has been purportedly done by the issuance of the impugned show cause notice. That opportunity mandated by the act appears to have not been furnished to the registered office.”

The Court also held that the petitioner was correct in asserting that filing information in Table 14 of Form GSTR-9C was optional during the relevant financial year.

“The competent authority has notified that the submission of information in Table 14 in Form GSTR-9C was optional for the period 2017-18 and 2018-19. The same exemption was further extended till the period of financial year 2022-2023 by series of notifications,” the court observed.

However, it clarified that even if the department believed Table 14 was mandatory, it was still required to follow the scrutiny process first.

“if jurisdiction under Section 73 of the CGST Act, 2017, was to be invoked, the procedure prescribed under Section 61 was nonetheless mandatorily required to be followed by the revenue.,” the judgment read.

Rejecting the department's objection on the ground of alternate remedy, the court relied on settled precedent to hold that writ jurisdiction was maintainable. The petition was accordingly allowed.

Case Title: M/S. PEPSICO INDIA HOLDINGS PVT. LTD. v THE UNION OF INDIA AND 3 ORS

Case Number: WP(C)/6960/2023

Appearances:

For Petitioner: Senior Advocate R. Shah assisted by advocates D. Borah and R..

For Respondent: Advocate S.C. Keyal

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