FACTS OF THE CASE

M/S MRK Infra (“Petitioner”), a GST‑registered entity, filed Writ Petition (Civil) No. 13185/2025 under Article 226 of the Constitution of India challenging:

  1. Show Cause Notice (SCN) dated 31.05.2024, and
  2. Impugned Order dated 08.08.2024 passed by the Sales Tax Officer/ Class II (STO), DGST, Ward‑94, Zone‑8 (“Respondent”),
    for FY 2019‑20, whereby a demand of ₹24,56,921/- was raised against the Petitioner.

The Petitioner also challenged the vires (validity) of multiple GST Notifications — Notification Nos. 9/2023‑Central Tax, 56/2023‑Central Tax, 9/2023‑State Tax, and 56/2023‑State Tax — contending procedural irregularities and invalid extensions under Section 168A of the Central Goods and Services Tax Act, 2017.

In connected petitions, this Court had earlier considered the validity of the Notifications and observed that the matter is pending before the Supreme Court in SLP No. 4240/2025.

On facts, the Petitioner submitted that:

  • It was not afforded an opportunity to file a reply to the SCN;
  • The impugned order was non‑speaking and passed without hearing; and
  • Therefore, the order is violative of principles of natural justice. 

ISSUES INVOLVED

  1. Whether the impugned order was passed in breach of the principle of natural justice by denying the Petitioner a reasonable opportunity to file a reply and be heard before the adjudication?
  2. Whether no‑hearing/ non‑speaking order is liable to be set aside despite pending questions on the validity of the Notifications and constitutional challenges?
  3. What relief should be granted if procedural irregularities in the SCN disposal are established? 

PETITIONER’S ARGUMENTS

The Petitioner contended that:

  • No effective opportunity was given to file a reply to the SCN despite multiple notices, and no personal hearing was afforded before issuing the adverse order;
  • The SCN adjudication without hearing violated the principle of audi alteram partem (principle of natural justice);
  • The impugned order is non‑speaking and cannot be sustained on merits;
  • Even if validity of Notifications is pending before the Supreme Court, procedural defects pertaining to hearing and reply should be remedied;
  • The impugned order should be set aside and the matter remanded to the adjudicating authority with directions to afford proper opportunity. 

RESPONDENT’S ARGUMENTS

The Respondent Government of NCT of Delhi submitted that:

  • Sufficient opportunities (including personal hearing notices) were issued;
  • The adjudicating authority acted within statutory authority under the GST regime;
  • Challenges to validity of Notifications and extensions under Section 168A are substantial and pending in connected proceedings before Supreme Court;
  • The Court’s intervention should be limited to declaring validity and procedural compliance;
  • No interference is required if the department followed established procedures. 

COURT ORDER / FINDINGS

After hearing the parties, the Delhi High Court — Coram Justices Prathiba M. Singh and Shail Jain — held as follows:

  1. The impugned order was passed without hearing the Petitioner or affording reasonable opportunity to reply to the SCN;
  2. This amounted to a violation of the principles of natural justice, as no effective opportunity was provided;
  3. Although validity of the Notifications is pending before the Supreme Court, that challenge does not preclude the Court from remanding the matter for fact‑specific procedural compliance;
  4. The impugned order was set aside on the limited ground of natural justice violation;
  5. The Petition was disposed of with directions that:
    • Petitioner be granted 30 days’ time to file reply to the SCN;
    • Thereafter, adjudicating authority shall issue a notice for personal hearing and consider Petitioner’s submissions;
    • A fresh order shall be passed, with all rights and remedies of parties left open; and
    • Access to GST portal shall be provided for uploading replies and related documents.

IMPORTANT CLARIFICATIONS

  • The Court’s finding did not decide validity of the challenged Notifications under Section 168A of the CGST Act; that question remains subject to the Supreme Court’s decision in SLP No. 4240/2025.
  • The Court reiterates that principles of natural justice are sacrosanct in tax adjudications — even if larger constitutional/ statutory validity controversies are sub‑judice.
  • Procedural compliance (reply/hearing) is a separate and justifiable ground for remand, independent of merits of the tax demand. 

SECTIONS INVOLVED

  • Article 226 of the Constitution of India — Judicial Review of administrative action
  • Section 168A, Central Goods and Services Tax Act, 2017 — Power to extend time limits by GST Council recommendations (issue under challenge; validity pending before Supreme Court)
  • Principles of natural justice / audi alteram partem

Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/75429082025CW131852025_154909.pdf

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