Facts of the Case

Kamal Rajput, proprietor of M/s Perfect Gear Industries, challenged an order dated 20th August, 2024 passed by the Sales Tax Officer for the tax period April 2019 to March 2020, along with a show cause notice dated 24th May, 2024, and also assailed Notification No. 56/2023-Central Tax and the corresponding State Tax notification which had extended the limitation for passing orders under Section 73. This challenge mirrored a large batch of petitions, led by DJST Traders Pvt. Ltd. vs. Union of India, in which the validity of the notifications — issued under Section 168A of the CGST Act — was under active consideration, with a cleavage of opinion among High Courts and the issue pending before the Supreme Court in S.L.P No. 4240/2025. On facts, no reply had been filed to the SCN, as the petitioner's Chartered Accountant, who had portal access, had not brought the notice/order to the petitioner's knowledge.

Issues Involved

  1. Whether relief can be granted to individual petitioners on the facts of ex-parte adjudication even while the larger question of validity of Notification No. 56/2023 remains sub judice before the Supreme Court.
  2. Whether an assessee who did not reply to a show cause notice due to failure of its authorised representative to flag it should be granted a further opportunity to be heard.

Petitioner's Arguments

  • The impugned order and notifications were challenged; alternatively, even if the notifications were upheld, the petitioner sought relief on facts since it had been unable to file a reply or avail a personal hearing, resulting in an ex-parte order with a substantial demand and penalty.

Respondent's Arguments

  • The Union/Department relied on the ongoing batch proceedings and the pendency of the notifications' validity before the Supreme Court, without specifically disputing the factual claim of non-receipt of the SCN by the petitioner personally.

Court Order / Findings

  • The Court noted the extensive judicial history on the impugned notifications — upheld by the Allahabad and Patna High Courts, quashed by the Guwahati High Court, and the subject of an SLP before the Supreme Court — and that the Punjab and Haryana High Court had directed all connected matters to abide by the eventual Supreme Court ruling.
  • Without delving into the vires of the notifications, and following its own consistent practice in similar cases (e.g., Sugandha Enterprises), the Court held that since the petitioner did not get a proper opportunity to be heard and had not filed any reply, the matter deserved to be remanded, the challenge to the notifications being left open pending the Supreme Court's decision.
  • The impugned order was set aside subject to payment of Rs. 20,000/- as costs to the GST Department, with the petitioner granted time till 15th January 2026 to file a reply, followed by a personal hearing and a fresh reasoned order.
  • It was made clear that any order passed thereafter would be subject to the outcome of the Supreme Court's decision on the notifications, and access to the GST portal was directed to be restored within a week.

Important Clarification

  • Even while the vires of Notification No. 56/2023-Central Tax (extending limitation under Section 168A) remains pending before the Supreme Court, individual assessees denied a fair opportunity to reply/be heard can still obtain a remand on facts, without the Court expressing any view on the notification's validity, and any fresh order remains subject to the eventual Supreme Court ruling.

Sections Involved

  • Section 168A, CGST Act, 2017 — power to extend time limits during special circumstances, subject to GST Council recommendation.
  • Section 73, CGST Act, 2017 — determination of tax not paid other than by fraud.

Decision – In Favour of

The writ petition was disposed of in part in favour of the Assessee, with the impugned order set aside on cost and a fresh opportunity granted, while the larger question of the notification's validity was expressly left open.

Case Details

Court: High Court of Delhi at New Delhi
Case No.: W.P.(C) 17781/2025
Coram: Justice Prathiba M. Singh and Justice Renu Bhatnagar
Date of Order: 24.11.2025

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