Delhi HC sets aside GST SCN as assessee did not get a proper opportunity to be heard [Read Order]

The Delhi High Court set aside the Goods and Service Tax (GST) Show cause notice (SCN) issued on finding that the assessee did not get a proper opportunity to be heard and remanded the matter back to the concerned Adjudicating Authority.

Menka Chaturvedi, the petitioner challenged the Show Cause Notice dated 22nd September, 2023 ( ‘the SCN’) pertaining to the Financial Year 2017-18, as also the consequent order dated 28th December, 2023 passed by the office of Sales Tax Officer Class II/ AVATO, Delhi ( ‘the impugned order’). The petition also challenges the vires of Notification No. 9/2023Central Tax dated 31st March, 2023 as also Notification No. 9/2023- State Tax dated 22nd June, 2023 (‘impugned notifications’).

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The validity of the impugned notifications were 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 fact, Notification Nos. 09 and 56 of 2023 (Central Tax) were challenged before various other High Courts. The Allahabad Court has upheld the validity of Notification no.9. The Patna High Court has upheld the validity of Notification no.56. Whereas, the Guwahati High Court has quashed Notification No. 56 of 2023

(Central Tax).

The Telangana High Court while not delving into the vires of the assailed notifications, made certain observations in respect of invalidity of Notification No. 56 of 2023 (Central Tax.

A division bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that in the similar fact in case ‘Neelgiri Machinery through its Proprietor Mr. Anil Kumar V. Commissioner Delhi Goods And Service Tax And Others’, where the SCN was uploaded on the ‘Additional Notices Tab’ had remanded the matter

The impugned demand orders dated 23rd April, 2024 and 5th December, 2023 are accordingly set aside. Further held that 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 emailed 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.

There is no doubt that after 16th January 2024, changes have been made to the GST portal and the ‘Additional Notices Tab’ has been made visible. The SCN was issued on 22nd September, 2023, and the same may not have come to the notice of the Petitioner.

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Under such circumstances, considering the fact that the Petitioner did not get a proper opportunity to be heard and no reply to the SCN has been filed by the Petitioner, the court remanded the matter back to the concerned Adjudicating Authority.

The Petitioner is granted time till 15th July 2025, to file the reply to the SCN. Upon filing of the reply, the Adjudicating Authority shall issue a notice for personal hearing to the Petitioner.

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. and of this Court in W.P.(C) 9214/2024 titled Engineers India Limited v. Union of India &Ors.

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