Facts of the Case

The petitioner, M/s Acme India, filed a writ petition under Article 226 of the Constitution challenging a Show Cause Notice dated 17.05.2024 and the consequent adjudication order dated 28.08.2024 passed by the Sales Tax Officer Class II/AVATO, Delhi, for Financial Year 2019–20. The impugned order raised a total demand of ₹1,79,45,652 comprising tax of ₹92,88,903, interest of ₹77,27,858 and penalty of ₹9,28,891.

The petitioner also challenged the constitutional validity of Notification No. 09/2023 (Central Tax) dated 31.03.2023 and Notification No. 56/2023 (Central Tax) dated 28.12.2023 issued under Section 168A of the CGST Act extending limitation for adjudication.

The case formed part of a larger batch of writ petitions where similar notifications were under challenge before various High Courts and were pending consideration before the Supreme Court in SLP No. 4240/2025.

Issues Involved

Whether the High Court should exercise writ jurisdiction to interfere with a GST adjudication order where the assessee had filed a reply to the show cause notice but failed to avail the opportunity of personal hearing, whether the petitioner should be relegated to the statutory appellate remedy under Section 107 of the CGST Act, and whether the challenge to limitation-extension notifications should be kept subject to the outcome of proceedings before the Supreme Court.

Petitioner’s Arguments

The petitioner contended that although a reply dated 18.06.2024 was duly filed to the show cause notice, the impugned adjudication order was passed without granting an effective personal hearing. It was argued that the impugned notifications extending limitation under Section 168A were ultra vires and that the demand order deserved to be set aside on grounds of violation of principles of natural justice and lack of jurisdiction.

Respondent’s Arguments

The Department submitted that the petitioner was granted an opportunity of personal hearing vide reminder notice dated 26.07.2024, which was not availed by the petitioner. It was argued that the adjudication order was passed in accordance with law after considering the reply on record and that writ jurisdiction ought not to be exercised when an efficacious statutory appellate remedy was available under Section 107 of the CGST Act.

Court Order / Findings

The Delhi High Court took note of the fact that the petitioner had filed a reply to the show cause notice and that an opportunity of personal hearing was duly granted but was not availed. The Court observed that in such circumstances, the adjudication order could not be said to suffer from violation of principles of natural justice warranting interference under Article 226.

The Court further observed that the challenge to the limitation-extension notifications under Section 168A was already pending before the Supreme Court in SLP No. 4240/2025 and that various High Courts had adopted the approach of either remanding matters or relegating parties to statutory appellate remedies, subject to the outcome of the Supreme Court proceedings.

Considering the availability of an alternate statutory remedy and the factual position that the petitioner did not avail the opportunity of personal hearing, the Court declined to interfere with the impugned order in writ jurisdiction.

Important Clarification

The High Court clarified that where an assessee files a reply to the show cause notice but chooses not to avail the opportunity of personal hearing, the adjudication order does not automatically become vulnerable to challenge on grounds of violation of natural justice. Challenges to limitation-extension notifications under Section 168A would remain subject to final adjudication by the Supreme Court.

Final Outcome

The writ petition was disposed of. The petitioner was granted liberty to file an appeal under Section 107 of the CGST Act on or before 30.11.2025 along with the requisite pre-deposit. The Appellate Authority was directed not to dismiss the appeal on the ground of limitation and to adjudicate the appeal on merits. The decision of the Appellate Authority was directed to remain subject to the outcome of SLP No. 4240/2025 pending before the Supreme Court and connected proceedings before the Delhi High Court.

Source Link- https://delhihighcourt.nic.in/app/showFileJudgment/75430102025CW155322025_180906.pdf

 

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