Facts of the Case

Fair Deal Cars Pvt. Ltd. challenged an Order-in-Original dated 26 April 2024 passed under Section 73 of the CGST/DGST Act, 2017 by the Assistant Commissioner, Division Shahdara, along with the underlying show cause notice dated 7 November 2023 pertaining to scrutiny of returns for April 2018 to March 2019. The petition also challenged Notification No. 56/2023 (Central Tax) and Notification No. 9/2023 (Central Tax) issued under Section 168A extending limitation for passing orders — a challenge that formed part of a large batch of petitions before the Delhi High Court, with the core validity question already pending before the Supreme Court in SLP No. 4240/2025. On facts, the petitioner's specific grievance was that no pre-consultation notice in Form GST DRC-01A was issued under Rule 142(1A) before the SCN, and that it consequently neither filed a reply nor availed of personal hearings offered on four separate dates.

Issues Involved

  1. Whether the challenge to Notifications 56/2023 and 9/2023 (Central Tax) under Section 168A of the CGST Act should be decided by the High Court while the identical question is pending before the Supreme Court.
  2. Whether an adjudication order passed under Section 73 without prior issuance of the mandatory pre-consultation notice (DRC-01A) and without the petitioner filing a reply or attending hearings can be sustained.
  3. What relief is appropriate for a petitioner who did not respond to the SCN or attend personal hearings, in a batch where six broad categories of similarly-placed petitioners are being dealt with.

Petitioner's Arguments

  • The impugned notifications extending the limitation period under Section 168A were invalid for want of proper prior recommendation of the GST Council, as also held by the Guwahati High Court while other High Courts had taken divergent views.
  • No DRC-01A pre-consultation notice was issued prior to the Section 73 SCN, contrary to Rule 142(1A) of the CGST Rules, denying the petitioner a fair opportunity to respond before formal proceedings began.
  • Since the petitioner never filed a reply and could not avail personal hearings, the ex-parte adjudication order should be set aside and the matter remanded for a hearing on merits.

Respondent's Arguments

  • Personal hearing opportunities were in fact offered to the petitioner on four separate dates — 22 January, 2 February, 9 February and 22 April 2024 — before the order was passed.
  • The validity of the impugned notifications under Section 168A was already sub judice before the Supreme Court in the Telangana-origin SLP, and judicial discipline required High Courts to await that outcome rather than rule independently.

Court Order / Findings

  • The Court declined to examine the vires of Notifications 9 and 56 of 2023 at this stage, noting the issue was pending before the Supreme Court in SLP No. 4240/2025 and that the Punjab & Haryana High Court had similarly deferred to the pending SLP.
  • It found that since no reply was filed and no personal hearing was availed despite opportunities being granted, the petitioner deserved one further opportunity to be heard on merits rather than having the notification challenge decide the outcome.
  • The impugned Section 73 order was set aside and the matter relegated to the Adjudicating Authority, with the petitioner permitted to file a reply by 10 July 2025 and granted a personal hearing thereafter, with notice to be sent to specified email/phone contacts.
  • GST portal access was directed to be ensured for the petitioner to enable filing of the reply, and all rights and remedies including the notification challenge were left open, subject to the outcome of the Supreme Court proceedings.

Important Clarification

  • Even where a taxpayer has failed to respond to a Section 73 SCN or avail personal hearings, courts may still grant a fresh opportunity to be heard where systemic issues (such as a disputed notification extending limitation) surround the proceedings.
  • A challenge to Notifications 56/2023 and 9/2023 (Central Tax) issued under Section 168A remains sub judice before the Supreme Court, and any adjudication order passed in the interim is expressly kept subject to that outcome.
  • Access to the GST portal and proper notice of hearing (including on specified email/phone) must be affirmatively ensured by the department when a matter is remanded.

Sections Involved

  • Section 73, CGST Act, 2017 – determination of tax not involving fraud or wilful misstatement.
  • Section 168A, CGST Act, 2017 – power to extend time limits on GST Council recommendation, the vires of which was in question.
  • Rule 142(1A), CGST Rules, 2017 – mandates a pre-consultation notice (DRC-01A) before issuance of an SCN.
  • Notification No. 56/2023 and No. 9/2023 (Central Tax) – notifications extending adjudication timelines, whose validity is pending before the Supreme Court.

Decision – In Favour of

The decision is in favour of the assessee to the extent that the ex-parte order stands set aside and a fresh opportunity of hearing is granted, though the larger notification-validity question remains undecided and subject to the Supreme Court's ruling.

Case Details

Court: High Court of Delhi at New Delhi. Case No.: W.P.(C) 12672/2024 & CM APPL. 52806/2024. Coram: Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta. Date of Decision: 6 May 2025 (order corrected and released 13 May 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.