Facts of the Case

The petitioner challenged:

  • Show Cause Notice (SCN) dated 28 May 2024
  • Consequential adjudication order dated 24 August 2024

The dispute pertained to Financial Year 2019–20 under GST law.

The petitioner also challenged the validity of certain GST notifications issued under Section 168A of the CGST Act, 2017, including:

  • Notification No. 56/2023 (Central & State Tax)
  • Notification No. 9/2023 (Central & State Tax)

However, the core grievance in the present petition was that:

  • No opportunity was given to file a reply to the SCN
  • No personal hearing was granted
  • The adjudication order was passed ex parte, raising demand and penalties

Issues Involved

  1. Whether the impugned adjudication order is liable to be set aside for violation of principles of natural justice?
  2. Whether failure to provide an opportunity to reply and hearing renders the order invalid and unsustainable?
  3. What is the effect of pending litigation before the Supreme Court regarding validity of GST notifications under Section 168A?

Petitioner’s Arguments

  • The impugned order was:
    • Non-speaking, cryptic, and vague
    • Passed without granting opportunity of hearing
  • No reply could be filed due to lack of opportunity
  • The adjudication violated audi alteram partem (right to be heard)
  • Therefore, the order deserved to be quashed outright 

Respondent’s Arguments

  • The adjudicating authority noted:
    • No reply was filed
    • No authorized representative appeared for hearing
  • Hence, the authority proceeded to:
    • Finalize demand
    • Pass the order based on available records

Court’s Findings / Order

The Delhi High Court held:

  • The petitioner was not afforded adequate opportunity to:
    • File reply to SCN
    • Participate in personal hearing
  • The impugned order was passed in violation of principles of natural justice

Key Directions

  • Impugned order set aside
  • Petitioner granted time till 10 July 2025 to file reply
  • Adjudicating authority directed to:
    • Provide personal hearing
    • Pass a fresh reasoned order

Important Clarification

  • The Court did not decide on the validity of GST notifications
  • The issue remains sub judice before the Supreme Court in:
    • M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.
  • Any fresh adjudication will be:
    • Subject to the outcome of Supreme Court proceedings
    • Also linked with Delhi High Court batch matters like:
      • Engineers India Limited v. Union of India & Ors.

Sections Involved

  • Article 226, Constitution of India
  • Section 73, CGST Act, 2017 (Adjudication of tax liability)
  • Section 168A, CGST Act, 2017 (Power to extend time limits)

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/PMS07052025CW48912025_160340.pdf

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