Facts of the Case

The present writ petition was filed by Alaknanda Steel through its proprietor challenging:

  • Show Cause Notice (SCN) dated 27.05.2024 for FY 2019–20
  • Consequential adjudication order dated 10.08.2024 passed by the Sales Tax Officer

The petitioner also challenged the validity of the following notifications:

  • Notification No. 9/2023 – Central Tax
  • Notification No. 56/2023 – Central Tax
  • Corresponding State Tax Notifications

The grievance of the petitioner was that:

  • No opportunity was granted to file a reply to the SCN
  • No personal hearing was provided
  • The adjudication order was passed ex parte
  • The order was cryptic, vague, and non-speaking 

Issues Involved

  1. Whether the impugned adjudication order passed without granting an opportunity of hearing violates principles of natural justice?
  2. Whether the petitioner should be granted an opportunity to respond to the SCN?
  3. What is the effect of the pending challenge to GST Notifications issued under Section 168A of the CGST Act?

Petitioner’s Arguments

  • The adjudication order was passed without granting any opportunity to file a reply or to be heard
  • The order is non-speaking and lacks reasoning
  • There is a clear violation of principles of natural justice
  • The proceedings were conducted ex parte resulting in adverse consequences including demand and penalties

Respondent’s Arguments

  • The order records that no reply or clarification was filed by the petitioner
  • The adjudicating authority proceeded based on available records and SCN

Court’s Findings / Order

The Delhi High Court held:

  • The petitioner was not afforded an opportunity to be heard
  • The adjudication order was passed without considering any reply
  • Such action is in violation of principles of natural justice

Order Passed

  • The impugned adjudication order was set aside
  • The petitioner was granted time till 10 July 2025 to file reply to SCN
  • Adjudicating Authority directed to:
    • Provide personal hearing
    • Consider reply and submissions
    • Pass a fresh reasoned order
  • GST portal access to be provided for compliance

Important Clarification by Court

  • The issue regarding validity of GST Notifications (Section 168A) is:
    • Kept open
    • Subject to outcome of pending proceedings before the Supreme Court in:
      • M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.
  • Also subject to decision in related Delhi High Court matters 

Sections Involved

  • Article 226 & 227 – Constitution of India
  • Section 73 – CGST Act (Adjudication of tax liability)
  • Section 168A – CGST Act (Power to extend time limits)
  • Principles of Natural Justice (Audi Alteram Partem)

Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/68906052025CW158142024_165852.pdf

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