FACTS OF THE CASE

  1. The petitioner, M/s Sanjay Medicos, challenged:
    • the Show Cause Notice (SCN) dated 23.05.2024, and
    • the assessment order dated 09.08.2024 issued by the Sales Tax Officer (GST adjudicating authority) for the FY 2019‑20.
  2. The petitioner also challenged the vires (validity) of GST Notifications Nos. 09/2023 & 56/2023 (both Central and State Tax) that extended time limits for adjudication under the GST regime.
  3. Prior related batch petitions (including DJST Traders Pvt. Ltd. v. Union of India) were heard by the Court on 22.04.2025, concerning the same impugned notifications. 

ISSUES INVOLVED

  1. Whether the impugned orders of demand and penalties are sustainable in law in absence of a proper opportunity of hearing to the petitioner.
  2. Whether the adjudication orders were passed without complying with principles of natural justice, i.e., without providing adequate opportunity to file reply and personal hearing.
  3. Whether the impugned GST Notifications extending limitation under Section 168A of the Central Goods & Services Tax Act, 2017 are valid and binding given the conflicting High Court precedents and pending Supreme Court proceedings. 

PETITIONER’S ARGUMENTS

The petitioner contended that:

  • No meaningful opportunity was afforded to them to respond to the SCN or participate in personal hearings.
  • As a result, the impugned order of demand was passed ex‑parte.
  • The challenge to extended limitation notifications (Nos. 09 and 56 of 2023) is central, as they form the statutory basis for examining demand after expiry of statutory time. 

RESPONDENT’S ARGUMENTS

The respondent (Sales Tax Officer/DGST) maintained that:

  • The demand and penalties were correctly raised considering statutory powers under CGST/SGST Act.
  • Adequate notices (SCN and reminders) were served upon the petitioner.
  • The petitioner failed to file replies within due time and failed to exercise hearing opportunities, thus justifying the adverse order. 

COURT ORDER / FINDINGS

  1. The Court observed that a similar writ and batch petitions were under examination in Supreme Court in S.L.P. No. 4240/2025 concerning the validity of notifications issued under Section 168A of the CGST Act.
  2. Given such pending Supreme Court authority and conflict among High Courts, the Delhi High Court refrained from finally adjudicating on the validity of impugned notifications at this stage.
  3. However, the High Court found the impugned assessment order to be non‑speaking and violative of principles of natural justice due to absence of proper hearing or reasonable opportunity to file replies to the SCN.
  4. The Court therefore set aside the impugned order and remanded the matter to the adjudicating authority with the following directions:
    • Petitioner to file their reply to the SCN within 30 days.
    • Thereafter, the adjudicating authority must issue personal hearing notice and decide the matter afresh after considering material on record.
    • Petitioner to deposit a token amount of Rs. 20,000/– for departmental costs.
  5. The Court clarified that the issue regarding validity of notifications remains open, subject to Supreme Court’s final decision. 

IMPORTANT CLARIFICATIONS

The Court did not decide the fundamental constitutional validity of the notifications under Section 168A; it was preserved.

The remand and hearing directions are given on principles of natural justice, not on merits of tax demands.

SECTIONS INVOLVED

  • Article 226, Constitution of India (Writ jurisdiction)
  • Section 168A, Central Goods & Services Tax Act, 2017 (Extended period for adjudication)
  • Principles of natural justice and procedural fairness (Common law doctrine)

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/PMS30102025CW164482025_152038.pdf 

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