Facts of the Case

M/s Gupta Sanitation, through its partner Ashwani Kumar Gupta, challenged an assessment order dated 25th July, 2024 passed by the Sales Tax Officer Class II/AVATO for the tax period April 2019 to March 2020, along with the show cause notice dated 28th May, 2024, and separately challenged the vires of Notification No. 56/2023-Central Tax dated 28th December, 2023, issued under Section 168A of the CGST Act extending adjudication timelines. The petition was one among a large batch before the Delhi High Court, with W.P.(C) No. 16499/2023 (DJST Traders) as the lead matter, where different High Courts across the country had taken divergent views on Notification Nos. 9 and 56 of 2023, and the issue was pending before the Supreme Court in S.L.P. No. 4240/2025 (M/s HCC-SEW-MEIL-AAG JV vs Assistant Commissioner of State Tax).

Issues Involved

  1. Whether the validity of Notification No. 56/2023-Central Tax, extending the Section 73 limitation period under Section 168A, could be decided while the identical question was pending before the Supreme Court.
  2. Whether the petitioner, who neither replied to the show cause notice nor availed a personal hearing, was nonetheless entitled to a fresh opportunity given the pendency of the notification challenge.

Petitioner's Arguments

  • Notification No. 56/2023 (Central Tax) was issued without proper prior recommendation of the GST Council as mandated under Section 168A, unlike Notification No. 9 which had proper prior recommendation.
  • Even if the notification is ultimately upheld, the petitioner, having been unable to file a reply or avail a personal hearing resulting in an ex-parte order, deserved relief similar to that granted in Sugandha Enterprises (W.P.(C) 4779/2025), where a comparable ex-parte order was set aside for want of hearing.

Respondent's Arguments

  • The Central and Delhi government counsel highlighted the divergent views of the Allahabad, Patna, Guwahati and Telangana High Courts on Notification Nos. 9 and 56 of 2023, and that the Punjab & Haryana High Court had already deferred to the pending Supreme Court proceedings.

Court Order / Findings

  • Recording that various High Courts have taken different views and the matter is squarely pending before the Supreme Court, the Bench declined to rule on the vires of Notification No. 56/2023 and left that issue open.
  • On facts, since the petitioner neither replied to the SCN nor attended any personal hearing, the Court applied its own precedent in Sugandha Enterprises and set aside the impugned order subject to payment of Rs. 10,000 as costs to the Delhi High Court Legal Services Committee, granting the petitioner time till 15th January, 2026 to file a reply, after which a personal hearing and a fresh reasoned order must follow.
  • Any order the Adjudicating Authority passes was made expressly subject to the outcome of the Supreme Court's decision on Notification No. 56/2023 in the HCC-SEW-MEIL-AAG JV SLP, and access to the GST portal was directed to be restored to enable the petitioner to upload its reply.

Important Clarification

  • Where the validity of a limitation-extending notification under Section 168A is sub judice before the Supreme Court, High Courts are granting conditional procedural relief (fresh reply opportunity, hearing) rather than deciding the vires question themselves.
  • An ex-parte Section 73 order passed without any reply or hearing is liable to be set aside even where the assessee made no earlier attempt to respond, subject to a costs condition, to preserve the right to be heard on merits.
  • Any resulting fresh order remains provisional, subject to being overturned or modified depending on the Supreme Court's ultimate ruling on Notification No. 56/2023.

Sections Involved

  • Section 168A, CGST Act, 2017 – empowers extension of time limits under the Act on the GST Council's recommendation, the basis for Notification No. 56/2023.
  • Section 73, CGST Act, 2017 – governs the assessment order and show cause notice under challenge.
  • Notification No. 56/2023-Central Tax dated 28.12.2023 – extended the Section 73 adjudication timeline for FY 2019-20, whose validity remains pending before the Supreme Court.

Decision – In Favour of

The petition was disposed of with directions that are procedurally in favour of the assessee (fresh reply opportunity and hearing on payment of costs), while the larger question of the notification's validity — which could favour either side depending on the Supreme Court's ruling — was left entirely open.

Case Details

Court: High Court of Delhi at New Delhi. Case No.: W.P.(C) 18748/2025. Coram: Hon'ble Justice Prathiba M. Singh and Hon'ble Justice Shail Jain. Date of Decision: 10th December, 2025.

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