Facts of the Case

M/s DHRL India Services Pvt. Ltd. challenged an assessment order dated 29th August, 2024 passed under Section 73 of the CGST Act, pursuant to a show cause notice dated 23rd/28th May, 2024 alleging that the petitioner had not declared correct tax liability in its GSTR-09 annual return and had made excess claims of Input Tax Credit for FY 2019-20, raising a demand along with interest and penalty. A reminder notice was issued on 8th January, 2025, but no personal hearing was granted. The petitioner explained that its GST compliance was handled by a consultant who was unwell and unaware of the proceedings, so no reply was filed and the order came to be passed unopposed; by the time it came to light, the limitation for filing a statutory appeal had already expired.

Issues Involved

  1. Whether an assessment order passed under Section 73 without affording any personal hearing, despite no reply being filed, can stand.
  2. Whether the limitation period for filing a statutory appeal should be extended where the petitioner only learnt of the order after the appeal period had lapsed.

Petitioner's Arguments

  • Despite continuously filing its GST returns, the petitioner was unaware of the show cause notice and the subsequent order because its GST consultant was unwell during the relevant period, and by the time this came to light the appeal limitation had expired.
  • Relying on this Court's ruling in Sugandha Enterprises through its Proprietor Devender Kumar Singh v. Commissioner Delhi GST (W.P.(C) 4779/2025), where a similar ex-parte order for want of reply was remanded, similar relief was warranted here.

Respondent's Arguments

  • The Panel Counsel for GNCTD did not dispute that no personal hearing had in fact been granted before the order was passed, notwithstanding the demand of Rs. 8,84,374 (later referenced as Rs. 88,474 in the order) being confirmed.

Court Order / Findings

  • The Court noted that, for whatever reasons, the petitioner was not afforded any opportunity to file a reply or attend a hearing, yet a substantial demand had been raised, and held that exercising writ jurisdiction to extend the limitation period was appropriate in these circumstances.
  • The time for filing a statutory appeal against the impugned order was extended till 31st August, 2025, along with the requisite pre-deposit, and if filed within that time the appeal shall not be dismissed as time-barred and shall be adjudicated on merits by the Appellate Authority.

Important Clarification

  • Where an assessee genuinely had no knowledge of a Section 73 order — whether due to a consultant's unavailability or otherwise — and the appeal limitation has since expired, courts will extend the limitation period under writ jurisdiction rather than leave the assessee remediless, provided the pre-deposit is furnished.
  • Continuous filing of GST returns by the assessee is treated as relevant evidence of bona fides supporting such limitation relief.

Sections Involved

  • Section 73, CGST Act, 2017 – governs demand and recovery of tax for reasons other than fraud, the basis of the impugned order.
  • Section 107, CGST Act, 2017 – prescribes the limitation period for filing a first appeal, extended here through writ jurisdiction.

Decision – In Favour of

The petition was disposed of in favour of the assessee to the extent that the appeal limitation was extended, allowing the tax demand to be contested on merits before the Appellate Authority rather than being finally confirmed by default.

Case Details

Court: High Court of Delhi at New Delhi. Case No.: W.P.(C) 11102/2025 & CM APPL. 45715/2025. Coram: Hon'ble Justice Prathiba M. Singh and Hon'ble Justice Shail Jain. Date of Order: 29th July, 2025.

Link to Download the Order

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