Facts of the Case

The Petitioner, Garg Agency through its proprietor Raj Rani Garg, filed a writ petition under Article 226 of the Constitution challenging the validity of various GST notifications issued under the Central Goods and Services Tax Act, 2017 and Delhi Goods and Services Tax Act, 2017.

The challenge was directed against Notification Nos. 9/2023 and 56/2023 (Central Tax and State Tax), along with a Show Cause Notice dated 21.05.2024 and an adjudication order dated 24.08.2024 for FY 2019–20.

The impugned order confirmed the demand raised in the SCN on the ground that the Petitioner neither filed a reply nor appeared for personal hearing despite opportunities being granted.

Issues Involved

  1. Whether the impugned GST Notifications extending limitation under Section 168A of the CGST Act are valid.
  2. Whether the adjudication order passed without effective participation of the Petitioner is sustainable in law.
  3. Whether principles of natural justice were violated due to non-consideration of Petitioner’s case. 

Petitioner’s Arguments

  • The impugned notifications were ultra vires the CGST Act and DGST Act as proper procedure under Section 168A was not followed.
  • The adjudication order was cryptic and non-speaking, passed without proper reasoning.
  • The Petitioner was unable to file a reply or attend hearings, and thus deserved another opportunity.
  • The demand and penalty were imposed without adequate hearing, violating principles of natural justice.

Respondent’s Arguments

  • The Petitioner was granted multiple opportunities to file a reply and attend personal hearings.
  • Despite such opportunities, the Petitioner failed to participate in proceedings.
  • Therefore, the adjudicating authority rightly proceeded ex parte and confirmed the demand. 

Court Findings / Order

The Delhi High Court observed:

  • The impugned order recorded that the Petitioner failed to respond or attend hearings despite opportunities.
  • However, considering that:
    • The validity of the GST notifications is currently pending before the Supreme Court, and
    • The Petitioner did not effectively avail the opportunity earlier,

the Court deemed it appropriate to grant one more opportunity in the interest of justice.

Key Directions:

  • The impugned adjudication order was set aside.
  • The matter was remanded back to the Adjudicating Authority.
  • The Petitioner was permitted to:
    • File a reply to the SCN by 10th July 2025.
    • Be granted a personal hearing thereafter.
  • The authority shall pass a fresh reasoned order on merits.
  • All rights and remedies of both parties were kept open.
  • Access to GST portal must be ensured for the Petitioner. 

Important Clarification

  • The Court did not decide the validity of the GST notifications.
  • The issue remains sub judice before the Supreme Court in:
    • M/s HCC-SEW-MEIL-AAG JV vs Assistant Commissioner of State Tax & Ors. (SLP No. 4240/2025)
  • The final outcome of this case shall be subject to the Supreme Court’s decision.
  • The High Court emphasized judicial discipline due to conflicting views of various High Courts on the same issue.

Sections Involved

  • Article 226 of the Constitution of India
  • Section 168A – Central Goods and Services Tax Act, 2017
  • Section 73 – CGST Act (Adjudication & Demand)
  • Relevant provisions of Delhi Goods and Services Tax Act, 2017

Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/68907052025CW44842025_154726.pdf 

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