Facts of the Case

The petitioner, M/s Walsons Services Pvt. Ltd., challenged the adjudication order dated 2nd August, 2024 passed by the Assistant Commissioner, Ward 201, Zone-11, Delhi, confirming a GST demand of ₹44,84,321 and a total liability of ₹86,63,462 for the tax period April 2019 to March 2020. The petitioner also challenged the show cause notice dated 29th May, 2024 issued by the Sales Tax Officer, Class II, Ward 201, Zone-11, Delhi. In addition, the petitioner questioned the validity of Notification Nos. 9 and 56 of 2023 issued under the CGST and State GST Acts extending limitation under Section 168A of the CGST Act.

The show cause notice and reminder fixing personal hearing were admittedly not responded to, and the adjudication order was passed ex parte. The petitioner submitted that the failure to respond was due to inadvertent oversight by the earlier consultant, as access to the GST portal was entirely through the consultant.

Issues Involved

Whether the adjudication order passed ex parte without effective opportunity of hearing violated principles of natural justice, whether the matter deserved remand for fresh adjudication, and whether relief could be granted while the validity of Notification Nos. 9 and 56 of 2023 issued under Section 168A of the CGST Act was pending consideration before the Supreme Court.

Petitioner’s Arguments

The petitioner contended that it did not get a real opportunity to file a reply or attend personal hearing due to inadvertent oversight by the previous consultant and lack of direct access to the GST portal. It was argued that the adjudication order was passed without consideration of the petitioner’s case on merits and deserved to be set aside in the interest of justice.

Respondent’s Arguments

The Revenue submitted that notices were duly issued and opportunities of hearing were granted, but the petitioner failed to respond or appear. It was contended that the adjudication order was passed in accordance with law.

Court Order / Findings

The Delhi High Court noted that no reply had been filed to the show cause notice and that the adjudication order had been passed ex parte. Relying on its earlier decision in Sugandha Enterprises v. Commissioner, DGST, the Court held that the petitioner ought to be afforded an opportunity to contest the matter on merits. Considering that the challenge to the limitation extension notifications was pending before the Supreme Court, the Court refrained from examining their validity at this stage.

The Court held that the matter deserved to be remanded to the adjudicating authority, subject to payment of costs, to balance equities.

Important Clarification

The High Court clarified that it had not examined the merits of the demand and that all rights and remedies of the parties were left open. It was further clarified that any fresh adjudication would be subject to the outcome of proceedings pending before the Supreme Court concerning the validity of Notification Nos. 9 and 56 of 2023 issued under Section 168A of the CGST Act.

Final Outcome

The writ petition was allowed subject to payment of costs of ₹10,000 to the Sales Tax Bar Association. The impugned adjudication order dated 2nd August, 2024 was set aside. The petitioner was granted time till 15th December, 2025 to file a reply to the show cause notice. The adjudicating authority was directed to grant personal hearing, consider the reply on merits, and pass a fresh reasoned order in accordance with law.

SOURCE LINK: https://delhihighcourt.nic.in/app/showFileJudgment/75414112025CW167302025_171424.pdf  

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