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2025 (5) TMI 237 - 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 16th 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.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court in this matter include:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of the Show Cause Notice and Adjudication Order under Section 73 CGST Act, 2017 The Petitioner challenged the SCN dated 25th September 2023 and the subsequent order dated 16th December 2023 on the ground that the SCN was uploaded on the GST portal under the 'Additional Notices Tab', which was not sufficiently brought to the Petitioner's attention, resulting in non-receipt of proper notice. Consequently, the Petitioner was unable to file replies or avail personal hearings, leading to ex-parte adjudication and imposition of demands and penalties. The Court referred to precedents including W.P.(C) 13727/2024 (Neelgiri Machinery), where a similar issue arose regarding SCNs uploaded under the 'Additional Notices Tab'. The Court in that case had remanded the matter to the adjudicating authority to ensure the Petitioner was given an opportunity to file replies and be heard, emphasizing the principle that orders should not be passed in default without proper notice and hearing. The Court noted that post-January 2024, the Department had made changes to the portal to enhance visibility of SCNs. However, since the impugned SCN in the present case was dated September 2023, prior to those changes, the Court found merit in the Petitioner's submission regarding non-receipt of notice. Accordingly, the Court set aside the impugned order and directed the Petitioner to file replies within thirty days. The Court mandated that hearing notices must not only be uploaded on the portal but also communicated via email and phone, ensuring effective service and opportunity for personal hearing. The matter was relegated back to the adjudicating authority for fresh consideration on merits after affording the Petitioner a fair hearing. Issue 2: Validity of Notifications No. 9/2023 and No. 56/2023 issued under Section 168A CGST Act, 2017 The Petitioner also challenged Notification No. 9/2023-Central Tax and Notification No. 56/2023-Central Tax, which extended the limitation period for adjudication of demands under the CGST Act. The challenge was on the ground that these notifications were issued without proper compliance with Section 168A of the CGST Act, which mandates prior recommendation of the GST Council before extending limitation periods. The Court noted that this issue was part of a larger batch of petitions, with the lead matter being under consideration before the Supreme Court in SLP No. 4240/2025. The Court observed that various High Courts had taken divergent views on the validity of these notifications: the Allahabad High Court upheld Notification No. 9; the Patna High Court upheld Notification No. 56; whereas the Guwahati High Court quashed Notification No. 56. The Telangana High Court had also expressed reservations about Notification No. 56, and its judgment was under review by the Supreme Court. The Supreme Court had issued notice and interim orders in the SLP, highlighting the cleavage of opinion among High Courts and the need for authoritative adjudication on whether the time limits for adjudication under Section 73 of the CGST Act could be extended by such notifications. Given this pending Supreme Court adjudication, the Court in the present matter refrained from expressing any opinion on the validity of the impugned notifications. It held that the challenge to the notifications would be subject to the outcome of the Supreme Court's decision and that the adjudicating authority's order would be governed accordingly. Issue 3: Procedural Compliance and Natural Justice in Tax Adjudication The Court emphasized the fundamental principle of natural justice that no order should be passed without affording the affected party a fair opportunity to be heard. The failure to provide personal hearings and the practice of merely uploading notices on a portal without ensuring effective notice was found to be contrary to this principle. The Court relied on its earlier decisions and those of coordinate benches mandating that notices and hearing communications must be effectively served, including by email and phone, to prevent inadvertent denial of opportunity to the taxpayer. This principle was applied to set aside the impugned order and direct fresh adjudication after proper service and hearing, thereby safeguarding the Petitioner's right to be heard. Issue 4: Impact of Conflicting High Court Decisions and Pending Supreme Court Adjudication The Court acknowledged the conflicting judicial opinions across various High Courts regarding the validity of the impugned notifications and the extension of limitation periods under Section 168A of the CGST Act. It noted the ongoing Supreme Court proceedings as the appropriate forum to resolve these divergences. In deference to judicial discipline and to avoid inconsistent rulings, the Court declined to express any opinion on the vires of the notifications and directed that the present proceedings be governed by the Supreme Court's eventual decision. The Court also noted interim orders passed by other High Courts, including the Punjab and Haryana High Court, which had disposed of similar petitions subject to the Supreme Court's ruling, thereby maintaining uniformity and judicial comity. 3. SIGNIFICANT HOLDINGS The Court's crucial legal reasoning and core principles established include the following:
The Court's final determinations on each issue are:
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