GST authorities must assess an unregistered person under Section 63 before invoking Section 74.

The petitioner, an educational institution, challenged a show-cause notice dated 27 August 2026 proposing recovery of tax under Section 74 of the applicable GST enactment.

The notice proceeded on the basis that the petitioner was unregistered and had not paid tax on its services

The petitioner claimed exemption under Serial No. 66 of Notification No. 12/2017-Central Tax (Rate), as amended by Notification No. 2/2018-Central Tax (Rate).

It sought certiorari to quash the notice.

1. Whether the authorities could proceed against an unregistered person under Section 74 without first invoking the assessment procedure under Section 63 of the applicable GST enactment

2. Whether the petitioner’s claimed exemption could be determined in the writ proceedings, or should be considered by the GST authorities

Section 63 of the applicable GST enactment, notwithstanding Sections 73, 74 and 74A, authorises the proper officer to assess the tax liability of a person who was liable to register but failed to do so, or whose registration was cancelled but who remained liable to pay tax.

The officer must assess liability to the best of their judgment for the relevant tax periods, within the prescribed five-year period, and provide the person an opportunity of being heard before making an assessment order.

The Court also relied on MRF Limited v. Additional Director, DGGI Delhi Zonal Unit and another, (2026) 155 GSTR 91, in support of the requirement of notice before a final order under Section 63.

The petitioner’s exemption claim arose under Serial No. 66 of Notification No. 12/2017-Central Tax (Rate), as amended by Notification No. 2/2018-Central Tax (Rate).

The Court noted that the impugned notice invoked Section 74 against the petitioner on the premise that it was unregistered and had not paid tax.

Because Section 63 specifically provides the assessment mechanism for an unregistered person liable to tax, the Court held that the Department had to first proceed under that provision, including by issuing the requisite notice and affording an opportunity of hearing.

The Court did not decide whether the petitioner was in fact entitled to the claimed exemption, leaving that question for determination by the GST authorities.

The petitioner was permitted to raise all available contentions, including its exemption claim.

The writ petition was disposed of without costs, and the connected miscellaneous petition was closed.