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2025 (5) TMI 224 - HC - GSTViolation of principles of natural justice - Service of SCN - SCN was uploaded on Additional Notices Tab and did not come to the knowledge of the Petitioner - impugned order passed without providing the Petitioner a personal hearing and in the absence of a reply on behalf of the Petitioner - Challenge to adjudication order - challenge to N/N. 09/2023-Central Tax dated 31st March 2023 issued by the Central Board of Indirect Taxes and Customs - HELD THAT - This Court in Neelgiri Machinery through its Proprietor Mr. Anil Kumar V. Commissioner Delhi Goods And Service Tax And Others 2025 (3) TMI 1308 - DELHI HIGH COURT under similar circumstances where the SCN was uploaded vide Additional Notices Tab had remanded the matter. It is relevant to note that post 17th January 2024 the Department has effected changes in the portal to ensure that the SCNs become visible to parties. However considering the SCN in the present case is of September 2023 following the above decision this Court inclined to set aside the impugned order and grant the Petitioner a fresh hearing. Let the entire matter be considered afresh and an order be passed on merits after duly considering the reply and the submissions made by the Petitioner in the personal hearing - Petition disposed off.
The core legal questions considered in this judgment include:
1. Whether the impugned show cause notice (SCN) and consequent order passed under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act) are valid, particularly in light of procedural fairness and service of notice. 2. The validity and legality of Notification No. 9/2023-Central Tax and Notification No. 56/2023-Central Tax issued under Section 168A of the CGST Act, which purportedly extend time limits for adjudication of SCNs and passing of orders. 3. The procedural compliance required under Section 168A of the CGST Act, especially the necessity of prior recommendation by the GST Council before issuance of notifications extending deadlines. 4. The impact of non-receipt or inadequate service of SCNs on the right of the petitioner to be heard and the validity of ex-parte orders passed in absence of personal hearings. 5. The interplay between pending challenges before various High Courts and the Supreme Court on the validity of the impugned notifications and their effect on the present proceedings. Issue-wise Detailed Analysis 1. Validity of the Impugned Notifications under Section 168A of the CGST Act The legal framework involves Section 168A of the CGST Act, which empowers the Central Government to extend time limits for adjudication of SCNs and passing of orders, subject to prior recommendation by the GST Council. The petition challenges the impugned Notifications No. 9/2023 and 56/2023 on grounds of procedural impropriety and non-compliance with Section 168A. Precedents and judicial interpretations reveal a divergence of views among various High Courts. The Allahabad High Court upheld Notification No. 9, while the Patna High Court upheld Notification No. 56. Conversely, the Guwahati High Court quashed Notification No. 56. The Telangana High Court expressed reservations about the validity of Notification No. 56 without deciding on its vires. The Supreme Court has been seized of the matter in SLP No. 4240/2025, examining whether the time limits for adjudication under Section 73 of the CGST Act and corresponding State GST Acts could be extended via these notifications. The Supreme Court noted the cleavage of opinion among High Courts and issued notice, indicating the issue's significance and complexity. The Court in the present case refrained from expressing any final view on the validity of the notifications, acknowledging the ongoing Supreme Court proceedings. It emphasized judicial discipline by deferring to the Supreme Court's forthcoming decision, as also reflected in the Punjab and Haryana High Court's order which stayed further adjudication pending the Supreme Court's ruling. 2. Procedural Fairness and Service of Show Cause Notices The petitioner contended that the SCN dated 25th September 2023 was uploaded only under the 'Additional Notices Tab' on the GST portal, which did not bring the notice to their actual knowledge. Consequently, the impugned order dated 30th December 2023 was passed ex-parte, without personal hearing or opportunity to file a reply. The Court relied on earlier rulings, notably W.P.(C) 13727/2024 (Neelgiri Machinery), and decisions in M/s ACE Cardiopathy Solutions Pvt. Ltd. and Kamla Vohra, which held that mere uploading of notices under an obscure or non-prominent tab on the portal does not constitute valid service if it results in denial of opportunity to be heard. The Court noted that post-January 17, 2024, the Department had improved the portal interface to ensure visibility of SCNs. However, since the present SCN was issued in September 2023, before these changes, the petitioner's grievance was justified. Accordingly, the Court set aside the impugned demand orders dated 23rd April 2024 and 5th December 2023 and directed that the petitioner be given an opportunity to file replies within thirty days. It further mandated that hearing notices must be sent not only by uploading on the portal but also by email, ensuring actual receipt and opportunity for personal hearing before the adjudicating authority. 3. Effect of Pending Supreme Court Proceedings on Adjudication The Court observed that the validity of the impugned notifications is a live issue before the Supreme Court. Therefore, it left the question of the notifications' validity open and clarified that any order passed by the adjudicating authority shall be subject to the Supreme Court's final decision. This approach balances the need to protect the petitioner's right to be heard and avoid ex-parte orders, while respecting the higher court's jurisdiction and avoiding conflicting rulings on the validity of the notifications. 4. Categorization and Interim Relief The Court identified six broad categories of cases pending before it, suggesting that depending on the category, appropriate interim relief and procedural directions could be granted without prejudging the notifications' validity. This pragmatic approach allows continuation of proceedings with procedural safeguards. Treatment of Competing Arguments The Department argued the validity of the notifications and the sufficiency of service through the GST portal. The petitioner emphasized the lack of actual notice and denial of personal hearings. The Court sided with the petitioner on procedural grounds, citing precedents that mandate effective communication and opportunity to be heard. On the validity of notifications, the Court deferred to the Supreme Court, acknowledging the conflicting High Court rulings and the importance of uniformity in this matter. Significant Holdings "Since the challenge to the above mentioned notifications is presently under consideration before the Supreme Court... the challenge made by the Petitioner to the impugned notification in the present proceedings shall also be subject to the outcome of the decision of the Supreme Court." "The impugned order dated 30th December, 2023 was passed without providing the Petitioner a personal hearing and in the absence of a reply on behalf of the Petitioner... The impugned demand orders dated 23rd April, 2024 and 5th December, 2023 are accordingly set aside." "The hearing notices shall now not be merely uploaded on the portal but shall also be e-mailed to the Petitioner and upon the hearing notice being received, the Petitioner would appear before the Department and make its submissions." Core principles established include:
Final determinations:
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