Adjudication Without Considering Timely Reply is Unsustainable: Delhi HC Sets Aside Rs 10.86 Cr GST Demand [Read Order]
The Court rejected the Revenue’s argument that the petitioner should have raised these issues in appeal. The court held that adjudication without considering the reply of the petitioner was fundamentally flawed
![Adjudication Without Considering Timely Reply is Unsustainable: Delhi HC Sets Aside Rs 10.86 Cr GST Demand [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/Adjudication-Delhi-HC-GST-Demand-taxscan.jpeg "Adjudication Without Considering Timely Reply is Unsustainable: Delhi HC Sets Aside Rs 10.86 Cr GST Demand [Read Order]")
The Delhi High Court set aside an Order-in-Original raising a GST demand of Rs. 10.86 crores on the ground that the adjudicating authority failed to consider the petitioner’s timely and detailed reply to the Show Cause Notice (SCN). The petitioner challenged the impugned order dated 6th January 2025 and corresponding GST DRC-07 summary dated 25th January 2025, alleging violation...
The Delhi High Court set aside an Order-in-Original raising a GST demand of Rs. 10.86 crores on the ground that the adjudicating authority failed to consider the petitioner’s timely and detailed reply to the Show Cause Notice (SCN).
The petitioner challenged the impugned order dated 6th January 2025 and corresponding GST DRC-07 summary dated 25th January 2025, alleging violation of principles of natural justice. The dispute arose regarding classification of products for GST purposes whether liable at 12% or 18%.
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The SCN was issued on 4th August 2024, and the petitioner submitted a reply via the GST portal on 2nd September 2024, served a hard copy on 3rd September 2024, and also emailed the reply on the same date.
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Despite the reply submitted by the petitioner, the adjudication order recorded that “no reply” had been filed and proceeded to determine the matter ex-parte.
The Bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that the impugned order failed to acknowledge the reply, leading to a substantial demand being raised without affording the petitioner proper opportunity of hearing.
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The Court observed that even though three hearing dates were scheduled, the returned postal communications were incorrectly interpreted as evidence of evasion. The adjudicating authority had also held the petitioner guilty of deliberate suppression without verifying the actual submissions made.
The Court rejected the Revenue’s argument that the petitioner should have raised these issues in appeal. The court held that adjudication without considering the reply of the petitioner was fundamentally flawed.
The Court quashed the impugned Order-in-Original dated 6th January 2025. The matter was remanded to the adjudicating authority for fresh decision after granting the petitioner three hearing opportunities. The notices for personal hearing are to be issued via portal, email, and SMS to the designated addresses and numbers.
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The Court clarified that it had not examined the merits and all contentions were left open. The adjudicating authority has been directed to conclude the matter within three months from the date of receipt of the order. The writ petition was allowed.
To Read the full text of the Order CLICK HERE
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