Delhi HC sets aside Order u/s 73 of CGST Act as the Challenge on GST Notification yet to be Adjudicated by Supreme Court [Read Order]

The Delhi High Court  in its recent ruling, set aside the order passed under section 73 of the Central Goods and Services Tax Act, 2017 (CGST) as the challenge on the GST notification was yet to be adjudicated by supreme court.

The Petitioner– K.K. Trading Co. challenged the order dated 11th August, 2024 issued by the office of the Sales Tax Officer Class (the ‘Sales Tax Officer’) under Section 73 of the CGST Act. 2017.  The petition also challenges the vires of Notification No. 56/2023- Central Tax dated 28th December, 2023 as also the Notification No. 56/2023-State Tax dated 11th July, ( ‘impugned notifications’).

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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:

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The Notification Nos.9 & 56/2023 dated 31-3-2023 were under ch.allenge.  These Notifications have been issued in the purported exercise of power under Section 168 (A) of the Central Goods and Services Tax Act. 2017 ( the "GST Act").

The issue that falls for the consideration of the 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.

A division bench of Justice Prathiba M. Singh and  Justice Rajneesh Kumar Gupta noted that the validity of the impugned notifications is under consideration before the Supreme Court and had disposed of several matters in the said batch of petitions after addressing other factual issues raised in the respective petitions.

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On facts, however, the submission of the Petitioner in the present petition is that the Petitioner was not afforded with an opportunity to file a reply to the Show Cause Notice dated 29th May, 2024 (‘the SCN’) issued by the Sales Tax Officer and the impugned order was passed without affording the Petitioner with an opportunity to be heard.

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The bench found that the impugned order is a non-speaking order set aside on the said ground. It was held  that since the Petitioner has not been afforded an opportunity to be heard and the said SCN, as also the consequent impugned order has been passed without hearing the Petitioner.

Since there is a challenge to the impugned notifications, which is still to be adjudicated by the Supreme Court as well as the Court, the Court allowed an opportunity to the Petitioner to contest the matter on merits.  The Petitioner is granted time till 15th July 2025, to file the reply to SCN.

It was further held that “the issue in respect of the validity of the impugned notification 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. “

To Read the full text of the Order CLICK HERE

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