Gauhati High Court Stays GST Demand On Flats Given For Free To Landowners

The Gauhati High Court on 7 January stayed coercive action pursuant to a GST demand raised on flats provided free of cost to landowners under a development agreement.

A Bench of Justice Soumitra Saikia was hearing a writ petition filed by a developer challenging a consolidated show cause notice issued under Section 74 of the Central Goods and Services Tax Act, 2017 (CGST), covering multiple financial years from 2017–18 to 2022–23.

The notices proposed a levy of GST on flats handed over free of cost to landowners under a development agreement. An order confirming the demand was subsequently passed, and the petitioner's appeal against the demand was rejected.

Before the High Court, the developer contended that Section 74 of the CGST Act mandates issuance of separate show cause notices for each financial year. He relied on judgments of the Madras, Bombay, Allahabad and Karnataka High Courts to contend that consolidated show cause notices spanning multiple assessment years are invalid.

Opposing the writ petition, the Department argued that the petition was not maintainable in view of the availability of an alternative statutory remedy, particularly since the GST Appellate Tribunal had been constituted and was slated to commence functioning from 21 January 2026.

After hearing preliminary submissions and noting the respondents' objection on maintainability, the Court observed that the issues raised required consideration. The matter has been listed on 6 February 2026 for admission.

Pending further consideration, the Court directed:

“Till the next date fixed, no coercive action in pursuance to the orders passed by the respondent authorities shall be initiated against the writ petitioner.”

The High Court also issued notice to the respondents and called upon them to file their counter affidavit in the matter.

Click here to read the Order.