Facts of the Case

  • The petitioner is a business entity against whom GST proceedings were initiated.
  • A Show Cause Notice (SCN) was issued for alleged tax liability under Section 73 of the CGST Act, 2017.
  • The adjudicating authority passed an order confirming demand and penalty.
  • The petitioner contended that:
    • No effective opportunity to file reply was granted.
    • No proper personal hearing was provided.
    • The order was passed ex-parte and is non-speaking.
  • The petition also challenged the validity of GST notifications extending limitation periods. 

Issues Involved

  1. Whether the impugned order passed under Section 73 CGST Act is liable to be set aside for violation of principles of natural justice?
  2. Whether the petitioner was denied a fair opportunity to file reply and participate in adjudication?
  3. Whether the validity of Notification Nos. 9/2023 and 56/2023 impacts the proceedings?

Petitioner’s Arguments

  • The petitioner was not granted adequate opportunity to respond to the SCN.
  • No meaningful opportunity of personal hearing was provided.
  • The adjudication order was passed ex-parte and without proper reasoning, rendering it a non-speaking order.
  • Therefore, the impugned order is liable to be quashed for violation of principles of natural justice.

Respondent’s Arguments

  • The department contended that:
    • Multiple opportunities were granted to the petitioner.
    • The petitioner neither filed a reply nor appeared for personal hearing.
    • Consequently, the authority proceeded to confirm the demand as per law.

Court’s Findings / Order

  • The Court observed that:
    • The petitioner had not filed a reply; however, effective opportunity must still be ensured.
    • The order appeared to have been passed without proper hearing, thereby violating natural justice.
  • Accordingly:
    • The impugned order was set aside.
    • The petitioner was granted 30 days to file reply to the SCN.
    • The adjudicating authority was directed to:
      • Provide notice of personal hearing,
      • Consider submissions,
      • Pass a fresh reasoned order.

Important Clarifications by Court

  • The issue regarding validity of GST notifications is kept open.
  • The matter is already pending before the Supreme Court in SLP No. 4240/2025 (M/s HCC-SEW-MEIL-AAG JV case).
  • Any fresh order passed shall be subject to the outcome of the Supreme Court decision.

Sections Involved

  • Section 73, Central Goods and Services Tax Act, 2017 – Determination of tax not paid/short paid
  • Section 168A, CGST Act, 2017 – Power to extend time limits
  • Relevant GST Notifications:
    • Notification No. 9/2023 – Central Tax
    • Notification No. 56/2023 – Central Tax
    • Corresponding State Tax Notifications

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/PMS23042025CW47792025_192650.pdf 

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