Facts of the Case

The petitioner, J M Traders through its proprietor Shivam Bansal, sought to set aside a show cause notice dated 03rd December, 2023 and the consequential order in FORM GST DRC-07 dated 6th April, 2024, and additionally challenged the vires of Notification 56/2023 (Central Tax) and Notification 09/2023 (Central Tax) issued under Section 168A. This challenge was part of a large batch before the Delhi High Court led by DJST Traders Pvt. Ltd. v. Union of India, where the validity of both notifications was under active consideration by the Supreme Court in a related SLP. On facts, the petitioner's specific grievance was that the SCN had been uploaded only under the 'Additional Notices Tab', so the petitioner had no opportunity to reply or attend the personal hearing before the ex parte order was passed.

Issues Involved

  1. Whether the impugned GST demand order, passed ex parte after the SCN was uploaded only under the 'Additional Notices Tab', should be set aside for want of effective notice and hearing.
  2. Whether the challenge to the vires of Notification Nos. 9/2023 and 56/2023 should be decided now or kept pending the Supreme Court's ruling in the related SLP.
  3. What interim protection and procedural directions are appropriate pending final resolution of the notification-validity question.

Petitioner's Arguments

  • The SCN dated 3rd December 2023, from which the demand order arose, was uploaded only on the 'Additional Notices Tab' of the portal and therefore did not come to the petitioner's knowledge, resulting in an ex parte order without a personal hearing.
  • This was factually identical to the Court's own ruling in Neelgiri Machinery v. Commissioner Delhi GST, where similarly placed notices led to remand for a fresh opportunity to reply and be heard.
  • The vires challenge to Notifications 9/2023 and 56/2023 should be preserved and left open, to abide by the outcome of the pending Supreme Court proceedings in S.L.P No. 4240/2025.

Respondent's Arguments

  • The Standing Counsel for the Department did not dispute the factual position regarding portal-tab placement of the SCN, noting that the Department had since 16th January 2024 changed the portal architecture to bring the 'Additional Notices & Orders' tab under the general menu, adjacent to the main notices tab.
  • On the larger question of notification validity, the Revenue maintained its position that the notifications were validly issued, pending final adjudication by the Supreme Court.

Court Order / Findings

  • Since the impugned SCN predated the Department's 16th January 2024 portal fix, the Court, following its own rulings in Satish Chand Mittal and Anant Wire Industries, held that the petitioner was denied a fair opportunity to reply and be heard.
  • Ex parte GST demand orders arising from SCNs uploaded only under the 'Additional Notices Tab' prior to the portal's January 2024 restructuring are liable to be set aside, with the Department directed henceforth to also email hearing notices rather than rely solely on the portal.
  • The impugned order was set aside, and the Petitioner permitted to file a reply by a fixed date, with hearing notices to be both emailed and uploaded, and the adjudication to proceed after a personal hearing.
  • The Court expressly left open the question of the validity of Notification Nos. 9/2023 and 56/2023, directing that the fresh adjudication order would be subject to the outcome of the Supreme Court's decision in the pending SLP.

Important Clarification

  • Where a GST show cause notice predating the portal's January 2024 architecture change was placed only under the 'Additional Notices Tab', resulting ex parte orders are liable to be set aside for denial of a fair hearing.
  • Courts hearing such batch matters are increasingly bifurcating relief: granting procedural relief (fresh notice, hearing) immediately, while keeping the substantive vires challenge to Notification 56/2023 pending the Supreme Court's ruling.
  • Any fresh adjudication order passed in the interim remains expressly subject to the final outcome on the notification's validity, so taxpayers retain the right to challenge it afresh if the notification is eventually struck down.

Sections Involved

  • Section 168A, CGST Act, 2017 – power to extend time limits in special circumstances, the source of the challenged Notifications 9/2023 and 56/2023.
  • Section 73, CGST Act, 2017 – determination of tax not paid, under which the impugned SCN and demand order were issued.
  • Section 75(4), CGST Act, 2017 – mandates a personal hearing before adjudication, denied here due to the notice-service defect.

Decision – In Favour of

The decision favours the assessee procedurally. The ex parte demand order was set aside for a fresh hearing, though the larger vires challenge to Notification 56/2023 was left open pending the Supreme Court's ruling.

Case Details

High Court of Delhi at New Delhi; W.P.(C) 14041/2024 and CM APPL. 58769/2024; J M Traders through Proprietor Shivam Bansal vs Union of India and Others; Coram: Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta; Decided on 06.05.2025.

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.