Facts of the Case

The Petitioner, Fair Deal Cars Pvt. Ltd., filed a writ petition under Article 226 challenging:

  • Order-in-Original dated 26 April 2024 passed under Section 73 of the CGST/DGST Act, 2017
  • Show Cause Notice dated 07 November 2023
  • Notifications No. 56/2023 and 09/2023 issued under Section 168A of the CGST Act

The Petitioner contended that the adjudication order was passed without proper opportunity and without issuance of a mandatory pre-consultation notice in Form GST DRC-01A under Rule 142(1A).

It was also noted that earlier proceedings had been initiated under Section 61 (scrutiny of returns), to which the Petitioner had responded.

Issues Involved

  1. Whether non-issuance of pre-consultation notice under Rule 142(1A) vitiates proceedings under Section 73 CGST Act
  2. Whether adjudication orders passed ex-parte without effective opportunity violate principles of natural justice
  3. Validity of Notification No. 56/2023 and 09/2023 issued under Section 168A CGST Act
  4. Whether extension of limitation for adjudication through notifications is legally valid without proper GST Council recommendation 

Petitioner’s Arguments

  • No pre-consultation notice in Form GST DRC-01A was issued as required under Rule 142(1A)
  • Due to procedural lapses, the Petitioner could not file reply or attend hearings
  • The adjudication order was passed ex-parte raising substantial demand and penalties
  • Notifications extending limitation were challenged as being contrary to Section 168A

Respondent’s Arguments

  • Opportunities of personal hearing were granted on multiple dates
  • The Petitioner failed to avail such opportunities
  • Proceedings were conducted as per statutory framework under the CGST Act

Court’s Findings / Order

The Delhi High Court observed:

  • No reply was filed and hearings were not attended by the Petitioner
  • However, in the interest of justice, another opportunity ought to be granted
  • The impugned order was set aside
  • The matter was remanded to the Adjudicating Authority for fresh adjudication on merits
  • The Petitioner was permitted to file reply by 10 July 2025
  • Authorities were directed to provide proper hearing and ensure access to GST portal

The Court further clarified that:

  • The issue of validity of impugned notifications remains open
  • Final outcome will be subject to the Supreme Court decision in pending SLP

Important Clarifications by Court

  • Adjudication must follow principles of natural justice
  • Even if hearings were scheduled, effective opportunity must be ensured
  • Validity of Notification 56/2023 and 09/2023 is sub judice before the Supreme Court
  • Orders passed shall be subject to outcome of SLP No. 4240/2025 (M/s HCC-SEW-MEIL-AAG JV case)

Sections / Rules Involved

  • Section 73, CGST Act, 2017
  • Section 61, CGST Act, 2017
  • Section 168A, CGST Act, 2017
  • Rule 142(1A), CGST Rules, 2017
  • Article 226, Constitution of India

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/68906052025CW126722024_164139.pdf 

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