M/S OAK SHIPPING SERVICES PVT. LTD. v. Union of India

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:

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 in S.L.P. NO. 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.

6. However, in cases where the challenge is to the parallel State Notifications, the same have been retained for consideration by this Court. The lead matter in the said batch is W.P.(C) 9214/2024 titled Engineers India Limited v. Union of India &Ors.

7. On facts, however, the submission of the Petitioner in the present petition is that the Petitioner was not afforded an opportunity to file a reply to the Show Cause Notice dated 31st May, 2024 and the impugned order was passed without affording the Petitioner with an opportunity to be heard. Hence, the impugned order, according to the Petitioner, is in violation of Principles of Natural Justice.

8. Heard. The Court has considered the submissions made. The Court has perused the records as well. In this petition, as mentioned above, no reply to the Show Cause Notice dated 31st May, 2024 has been filed by the Petitioner. Relevant portion of the impugned order reads as under: “Whereas, SCN/ DRC-1 [see rule 100(2) & 142(1)(a)] was issued to the taxpayer under Section 73 of CGST / DGST Act & Rules, 2017; And whereas, it is noticed that the Taxpayer neither filed reply/explanation within stipulated period nor appeared for Personal Hearing before Proper Officer on the given date and time, Further, another opportunity to submit reply and observing principles of natural justice, opportunity for Personal Hearing, as per provision of Section 75(4) DGST Act, was also provided to the taxpayer by issuing "REMINDER" through the GST portal. Now, since no reply / explanation has been received from the taxpayer despite sufficient and repeated opportunities, which indicate that the taxpayer has nothing to say in the matter. And whereas, further as per section 73(7) notice of tax and interest is to be given while section 73(9) prescribes for imposition of penalty equivalent to 10% of tax or Rs. 10000/whichever is higher in case reply is not found to be satisfactory. Keeping in view the above provisions, it is clear that imposition of penalty is mandatory and by default, in case reply is found not to be satisfactory. In the instant case, the taxpayer did not even respond, thus the registered person is liable to pay due penalty. In view of aforesaid circumstances, the undersigned is left with no other option but to create demand as ex-parte, in accordance with the provisions of CGST / DGST Act & Rules,

2017. The said tax, interest and penalty is required to be deposited within 90 days of issuance of this notice.”

9. Considering the fact that the Petitioner has not been afforded an opportunity to be heard before the impugned order was passed, this Court is of the opinion that an opportunity ought to be afforded to the Petitioner to contest the matter on merits.

10. Accordingly, the impugned order is set aside. The Petitioner is permitted to file the reply to Show Cause Notice dated 31st May, 2024 by 10th July, 2025. Upon filing of the reply, the Adjudicating Authority shall issue to the Petitioner, a personal hearing. The personal hearing notice shall be communicated to the Petitioner on the following mobile no. and e-mail address: Mobile No.: 9811081159 E-mail Address: bhatiav68@gmail.com

11. The reply filed by the Petitioner to the Show Cause Notice dated 31st May, 2024 along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and fresh order with respect to the Show Cause Notice shall be passed accordingly.

12. All the 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 reply as also access to the notices and related documents.

13. However, it is again made clear that the issue in respect of the validity of the impugned notifications is left open and the order of 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’ and this Court in W.P.(C) 9214/2024 titled ‘Engineers India Limited v. Union of India & Ors’.

14. The petition is disposed of in the above terms. Pending applications, if any, are also disposed of.

PRATHIBA M. SINGH, J. RAJNEESH KUMAR GUPTA, J. MAY 7, 2025/da/rks (Corrected & released on 15th May, 2025)