GST Demand for Advertisement Fee Cannot Be Enforced Without Hearing: P&H HC [Read Order]

In a recent ruling, the Punjab and Haryana High Court held that a GST demand raised by the Municipal Corporation, Chandigarh for advertisement fee cannot be enforced without granting the affected party an opportunity of hearing.

CSJ Infrastructure Private Limited filed a writ petition challenging a demand notice issued by the Chief Administrator-cum-Commissioner which informed to deposit a sum of Rs. 2,12,00,245 towards advertisement fee, penalty, interest and GST for the period from 1 July 2025 to 15 August 2025, during which advertisements were allegedly displayed within the enclosed commercial mall premises owned by the petitioner.

The petitioner’s counsel argued that the demand notice had been issued straightaway without any prior notice or opportunity of hearing. They submitted that the action of the respondent authorities was in clear violation of the principles of natural justice, as the petitioner was never put to notice nor given a chance to explain or contest the alleged liability before such a substantial financial demand was raised.

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During the hearing, senior counsel for the Municipal Corporation fairly argued that the respondent authorities were willing to grant the petitioner a proper opportunity of hearing before passing any final order.

The counsel stated that the demand notice could be treated as a show cause notice to which the petitioner would be entitled to submit a formal reply. The respondents also assured the court that the competent authority would decide the matter in accordance with law within four weeks, after hearing all concerned parties and would pass a reasoned speaking order.

Justice Harsh Bunger observed that in view of the statement made by the respondents agreeing to follow due process, no further orders were required to be passed by the court at that stage. The court pointed out that once the respondent authorities had agreed to treat the impugned demand as a show cause notice and afford an opportunity of hearing, the grievance raised by the petitioner stood adequately addressed.

The court disposed of the writ petition by directing that the demand notice be treated only as a show cause notice. The competent authority was directed to decide the matter within four weeks by passing a speaking order after affording due opportunity of hearing to all parties. All pending applications were also closed.

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