DGGI’s Letter Quantifying GST demand and Penalty is Only a Response, Not

The Delhi High Court has clarified that a letter from the Directorate General of GST Intelligence (DGGI) that merely quantifies a potential GST demand and penalty is not a formal order and cannot be a substitute for a proper show-cause notice (SCN). The court directed the DGGI to issue a formal SCN to the petitioner, allowing them to respond to the allegations in accordance with the due process of law. The court held that adjudication proceedings can only be initiated through a valid SCN as prescribed under the GST Act. A simple letter or communication, even if it details the alleged liabilities, does not meet the statutory requirements of an SCN. This ruling is crucial for protecting taxpayer rights, as it ensures that they are given a formal and fair opportunity to contest any proposed tax demand before any adverse action is taken by the authorities.