Facts of the Case

The petitioner, Surender Singh Chahal, challenged an order dated 02.08.2024 passed by the Sales Tax Officer Class II/AVATO, Ward 61, for the tax period April 2019 to March 2020, along with the vires of Notification No. 56/2023-Central Tax and the corresponding State Tax notification issued under Section 168A of the CGST Act, 2017. A Show Cause Notice dated 23.05.2024 and a reminder dated 22.07.2024 fixing a personal hearing on 25.07.2024 had been issued, but no reply was filed and no hearing was attended, resulting in an ex-parte adjudication order. The petition was one among a large batch before the Delhi High Court challenging the extended limitation notifications, the lead matter being DJST Traders Pvt. Ltd. vs. Union of India.

Issues Involved

  1. Whether Notification No. 56/2023 (Central and State Tax), issued under Section 168A extending limitation for adjudication, is valid — an issue already pending before the Supreme Court.
  2. Whether the petitioner, having filed no reply to the SCN and attended no hearing, was nevertheless entitled to a fresh opportunity given the pendency of the notification challenge.

Petitioner's Arguments

  • Notification No. 56/2023 was issued without following the mandatory procedure under Section 168A, which requires prior recommendation of the GST Council; ratification, if any, came only after issuance.
  • The petitioner could not file a reply or avail a personal hearing due to circumstances beyond control, resulting in an ex-parte order and a non-speaking demand.
  • The Additional Notices Tab issue on the GST portal was cited, though the Court found this argument inapplicable given the SCN post-dated the January 2024 portal changes.

Respondent's Arguments

  • The Department relied on the settled procedural history: SCN dated 23.05.2024, reminder dated 22.07.2024, and personal hearing fixed for 25.07.2024, none of which were responded to by the petitioner.
  • The impugned order recorded that the taxpayer neither filed objections in DRC-06 nor appeared for hearing despite sufficient opportunities being granted.

Court Order / Findings

  • The Court noted a cleavage of judicial opinion — Allahabad upholding Notification No. 9, Patna upholding Notification No. 56, Guwahati quashing Notification No. 56 (Central Tax) — with the issue now pending before the Supreme Court in SLP No. 4240/2025 (HCC-SEW-MEIL-AAG JV).
  • Relying on its own precedent in Sugandha Enterprises, the Court held that since no opportunity of hearing was availed and the order was effectively non-speaking on merits, the matter deserved to be remanded, notwithstanding the pending notification challenge.
  • The impugned order was set aside subject to payment of Rs. 15,000 as costs to the Delhi High Court Clerks Association; the petitioner was granted time till 15.12.2025 to file a reply, followed by a personal hearing and a fresh reasoned order.
  • The question of validity of the impugned notifications was expressly left open, to abide by the outcome of the Supreme Court's decision.

Important Clarification

  • Pendency of a challenge to Section 168A extension notifications before the Supreme Court does not automatically stay individual assessment proceedings; courts may still grant procedural relief (fresh hearing) without ruling on the notifications' validity.
  • Relief for denial of hearing can be conditioned on payment of costs where the assessee's own default in responding to notices contributed to the ex-parte outcome.
  • Any fresh order passed on remand remains subject to the eventual Supreme Court ruling on the notifications.

Sections Involved

  • Section 168A, CGST Act, 2017 — power to extend time limits in special circumstances on GST Council recommendation.
  • Section 73, CGST Act, 2017 — determination of tax for the relevant period, subject to the limitation extended by the challenged notifications.

Decision – In Favour of

Disposed of with directions; partly in favour of the Assessee — the ex-parte order was set aside for a fresh opportunity, conditional on costs, while the substantive notification-validity question was left undecided.

Case Details

Court: High Court of Delhi at New Delhi
Case No.: W.P.(C) 15687/2025 & CM APPL. 64165/2025
Coram: Justice Prathiba M. Singh and Justice Shail Jain
Date of Order: 10.11.2025

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.