Facts of the Case

The petitioner, Justwork Technologies Private Limited, challenged a Show Cause Notice dated 17th May, 2024 and an adjudication order dated 21st August, 2024 passed by the Sales Tax Officer, Ward 86, Zone 9, Delhi, for the tax period April 2019 to March 2020. The petitioner also challenged the vires of Notification Nos. 9 and 56 of 2023 issued under the CGST and State GST Acts, which extended limitation periods for adjudication under Section 168A of the CGST Act.

The challenge to the notifications was part of a larger batch of writ petitions, with DJST Traders Private Limited v. Union of India being the lead matter, wherein divergent views had been expressed by various High Courts and the issue was pending adjudication before the Supreme Court in SLP No. 4240/2025.

Issues Involved

Whether the adjudication order passed without filing of reply and without personal hearing violated principles of natural justice, whether the matter deserved remand for fresh adjudication, and whether the validity of Notification Nos. 9 and 56 of 2023 issued under Section 168A of the CGST Act should be examined at this stage.

Petitioner’s Arguments

The petitioner contended that no effective opportunity was granted to file a reply to the show cause notice or to participate in personal hearing, resulting in an ex parte order raising substantial tax demands and penalties. It was further argued that the impugned notifications extending limitation were ultra vires Section 168A of the CGST Act.

Respondent’s Arguments

The Revenue submitted that the petitioner failed to respond to the show cause notice and reminders issued, and that the adjudication order was passed in accordance with law. It was contended that the issue of validity of the impugned notifications was pending consideration before the Supreme Court.

Court Order / Findings

The Delhi High Court observed that the petitioner had not filed any reply to the show cause notice nor participated in the personal hearing, and consequently, the adjudication order had been passed ex parte. Following its earlier decision in Sugandha Enterprises v. Commissioner, DGST, the Court held that the principles of natural justice required that the petitioner be afforded a proper opportunity to contest the matter on merits.

Considering the pendency of the challenge to Notification Nos. 9 and 56 of 2023 before the Supreme Court, the Court refrained from examining their validity at this stage. The impugned adjudication order was set aside and the matter was remanded to the adjudicating authority for fresh consideration.

Important Clarification

The High Court clarified that the issue regarding the validity of Notification Nos. 9 and 56 of 2023 issued under Section 168A of the CGST Act was left open and any fresh adjudication would be subject to the outcome of the proceedings pending before the Supreme Court. All rights and remedies of the parties were expressly kept open.

Final Outcome

The writ petition was allowed. The impugned adjudication order dated 21st August, 2024 was set aside subject to payment of costs of ₹20,000 to the Delhi High Court Legal Services Committee. The petitioner was granted time till 15th January, 2025 to file a reply to the show cause notice, and the adjudicating authority was directed to grant personal hearing and pass a fresh reasoned order in accordance with law.

SOURCE LINK: https://delhihighcourt.nic.in/app/showFileJudgment/PMS27112025CW179692025_170746.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.