Facts of the Case

The petitioner, T V Sundram Iyengar and Sons Private Limited, filed a writ petition challenging the show cause notice dated 08.05.2024 and the consequent adjudication order dated 24.08.2024 passed by the Sales Tax Officer, Class II/AVATO, Ward 71, Zone-6, Delhi for the tax period April 2019 to March 2020. The impugned order confirmed a substantial GST demand against the petitioner. The petitioner also challenged Notification Nos. 9/2023 (Central Tax), 9/2023 (State Tax), 56/2023 (Central Tax), and 56/2023 (State Tax) issued under Section 168A of the CGST Act extending limitation periods. At the outset, the petitioner did not press the challenge to provisional attachment of its bank account.

Issues Involved

Whether the GST adjudication order passed without the petitioner filing a reply or being effectively heard violates principles of natural justice, whether the matter should be remanded for fresh adjudication, and whether the challenge to notifications issued under Section 168A of the CGST Act can be adjudicated at this stage.

Petitioner’s Arguments

The petitioner submitted that it could not respond to the show cause notice or participate in the adjudication proceedings as the company had undergone a demerger in 2021 and the impugned notice was inadvertently missed by the accounting department handling GST matters. It was argued that the adjudication order was passed ex parte without granting a meaningful opportunity of hearing, thereby violating principles of natural justice. The petitioner also challenged the validity of the notifications extending limitation under Section 168A of the CGST Act.

Respondent’s Arguments

The respondents contended that the show cause notice was duly issued, reminders were sent, and a personal hearing was fixed, but the petitioner neither filed a reply nor appeared for the hearing. It was argued that the adjudication order was therefore rightly passed based on available records and that the challenge to the notifications was already pending consideration before the Supreme Court.

Court Order / Findings

The Delhi High Court observed that no reply had been filed to the show cause notice and the adjudication order had been passed without the petitioner having an opportunity to contest the matter on merits. Relying on its earlier decision in Sugandha Enterprises vs. Commissioner, DGST, the Court held that in such circumstances, the matter ought to be remanded to the adjudicating authority to afford the petitioner an opportunity to file a reply and to be heard. The Court further noted that the challenge to the notifications issued under Section 168A of the CGST Act was pending consideration before the Supreme Court and therefore refrained from adjudicating the same.

Important Clarification

The Court clarified that the validity of the notifications issued under Section 168A of the CGST Act was left open and that any fresh adjudication order passed by the adjudicating authority would be subject to the outcome of proceedings pending before the Supreme Court and related matters before the Delhi High Court. All rights and remedies of the parties were kept open.

Final Outcome

The writ petition was disposed of by setting aside the impugned adjudication order dated 24.08.2024, subject to payment of ₹15,000 as costs to the Delhi High Court Bar Association. The petitioner was granted time till 31.01.2025 to file a reply to the show cause notice, and the adjudicating authority was directed to grant a personal hearing and pass a fresh reasoned order in accordance with law, subject to the final decision of the Supreme Court on the validity of the impugned notifications.

Source Link- https://delhihighcourt.nic.in/app/showFileJudgment/PMS22122025CW194562025_172101.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.