Full Text
HIGH COURT OF DELHI
Date of Decision: 7th May, 2025
SALAK CHAND PROPRIETOR OF S K ASSOCIATES....Petitioner
Through: Mr. Rajesh Mahna, Mr. Ramanand Roy, Mr. Mayank Kouts & Mr. Shiva Narang, Advs. (M: 7373900606)
Through: Mr. Sumit Batra, Advocate.
Prathiba M. Singh, J. (Oral)
JUDGMENT
1. This hearing has been done through hybrid mode.
2. The present petition has been filed on behalf of the Petitioner- Salak Chand through Proprietor SK Associates under Article 226 of the Constitution of India inter alia, challenging the impugned order dated 1st April, 2024 passed by the Respondent No. 3- Goods and Service Tax Officer.
3. The petition also challenges the vires of Notification No. 56/2023- Central Tax dated 28th December, 2023 issued by the Central Board of Indirect Taxes and Customs.
4. The validity of the impugned notifications was under consideration before this Court in a batch of petitions with the lead petition being W.P.(C) 16499/2023 titled ‘DJST Traders Pvt. Ltd. vs. Union of India and Ors.’. In the said batch of petitions, on 22nd April, 2025, the parties were heard at length qua the validity of the impugned notifications and accordingly, the following order was passed:
Court was to the legality, validity and propriety of the Notification No.13/2022 dated 5-7-2022 & Notification Nos.[9] and 56 of 2023 dated 31-3-2023 & 8-12-2023 respectively.
2. However, in the present petition, we are concerned with Notification Nos.[9] & 56/2023 dated 31-3-2023 respectively.
3. These Notifications have been issued in the purported exercise of power under Section 168 (A) of the Central Goods and Services Tax Act. 2017 (for short, the "GST Act").
4. We have heard Dr. S. Muralidhar, the learned Senior counsel appearing for the petitioner.
5. The issue that falls for the consideration of this Court is whether the time limit for adjudication of show cause notice and passing order under Section 73 of the GST Act and SGST Act (Telangana GST Act) for financial year 2019-2020 could have been extended by issuing the Notifications in question under Section 168-A of the GST Act.
6. There are many other issues also arising for consideration in this matter.
7. Dr. Muralidhar pointed out that there is a cleavage of opinion amongst different High Courts of the country. 8. Issue notice on the SLP as also on the prayer for interim relief, returnable on 7-3- 2025.”
7. In the meantime, the challenges were also pending before the Bombay High Court and the Punjab and Haryana High Court. In the Punjab and Haryana High Court vide order dated 12th March, 2025, all the writ petitions have been disposed of in terms of the interim orders passed therein. The operative portion of the said order reads as under:
aforesaid SLP.
66. Keeping in view the judicial discipline, we refrain from giving our opinion with respect to the vires of Section 168-A of the Act as well as the notifications issued in purported exercise of power under Section 168-A of the Act which have been challenged, and we direct that all these present connected cases shall be governed by the judgment passed by the Hon'ble Supreme Court and the decision thereto shall be binding on these cases too.
67. Since the matter is pending before the Hon'ble Supreme Court, the interim order passed in the present cases, would continue to operate and would be governed by the final adjudication by the Supreme Court on the issues in the aforesaid SLP- 4240-2025.
68. In view of the aforesaid, all these connected cases are disposed of accordingly along with pending applications, if any.”
8. The Court has heard ld. Counsels for the parties for a substantial period today. A perusal of the above would show that various High Courts have taken a view and the matter is squarely now pending before the Supreme Court.
9. Apart from the challenge to the notifications itself, various counsels submit that even if the same are upheld, they would still pray for relief for the parties as the Petitioners have been unable to file replies due to several reasons and were unable to avail of personal hearings in most cases. In effect therefore in most cases the adjudication orders are passed ex-parte. Huge demands have been raised and even penalties have been imposed.
10. Broadly, there are six categories of cases which are pending before this Court. While the issue concerning the validity of the impugned notifications is presently under consideration before the Supreme Court, this Court is of the prima facie view that, depending upon the categories of petitions, orders can be passed affording an opportunity to the Petitioners to place their stand before the adjudicating authority. In some cases, proceedings including appellate remedies may be permitted to be pursued by the Petitioners, without delving into the question of the validity of the said notifications at this stage.
11. The said categories and proposed reliefs have been broadly put to the parties today. They may seek instructions and revert by tomorrow i.e., 23rd April, 2025.”
5. Thereafter, on 23rd April, 2025, this Court, having noted that the validity of the impugned notifications is under consideration before the Supreme Court, had disposed of several matters in the said batch of petitions after addressing other factual issues raised in the respective petitions. Additionally, while disposing of the said petitions, this Court clearly observed that the validity of the impugned notifications therein shall be subject to the outcome of the proceedings before the Supreme Court.
6. On facts, however, the submission of the Petitioner is that the Show Cause Notice dated 11th December, 2023 from which the impugned order arises, was uploaded on the ‘Additional Notices Tab’ of the GST Portal. Therefore, the same did not come to the knowledge of the Petitioner. The impugned order was passed without providing the Petitioner a personal hearing and in the absence of a reply on behalf of the Petitioner.
7. In fact, this Court in W.P.(C) 13727/2024 titled ‘Neelgiri Machinery through its Proprietor Mr. Anil Kumar V. Commissioner Delhi Goods And Service Tax And Others’, under similar circumstances where the Show Cause Notice was uploaded in the ‘Additional Notices Tab’ on the GST portal had remanded the matter in the following terms:
projected on the GST Portal under the tab ‘Additional Notices & Orders’. He submits that the said issue has now been addressed and the ‘Additional Notices & Orders’ tab is placed under the general menu and adjacent to the tab ‘Notices & Orders’.
8. In view of the above, the present petition is allowed and the impugned order is set aside.
9. The respondent is granted another opportunity to reply to the impugned SCN within a period of two weeks from date. The Adjudicating Authority shall consider the same and pass such order, as it deems fit, after affording the petitioner an opportunity to be heard.
10. The present petition is disposed of in the aforesaid terms.
11. All pending applications are also disposed of.”
7. The impugned demand orders dated 23rd April, 2024 and 5th December, 2023 are accordingly set aside. In response to show cause notices dated 04th December, 2023 and 23th September, 2023, the Petitioner shall file its replies within thirty days. The hearing notices shall now not be merely uploaded on the portal but shall also be e-mailed to the Petitioner and upon the hearing notice being received, the Petitioner would appear before the Department and make its submissions. The show cause notices shall be adjudicated in accordance with law.
8. The petitions are disposed of in the above terms. The pending application(s), if any, also stand disposed of.”
8. It is relevant to note that post 16th January 2024, the GST Department has effected changes in its portal to ensure that the Show Cause Notices become visible to parties.
9. The SCN in the present case is dated 11th December, 2023, in terms of Neelgiri (supra), the Petitioner has not had sufficient opportunity to file a reply or an opportunity to be heard. Accordingly, the matter deserves to be remanded back to the concerned Adjudicating Authority.
10. Let the reply be filed by 10th July 2025. A personal hearing shall be granted to the Petitioner and the notice for the same shall be sent on the following email address: email id- rajeshmahna@yahoo.co.in
11. All rights and remedies of the parties are left open. Access to the GST Portal, if not already available, shall be provided to the Petitioner to enable filing of the reply and access to the notices and related documents.
12. However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.
13. Petition is disposed of in these terms. All pending applications are also disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 7, 2025/da/rks (corrected & released on 13th May, 2025)