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2025 (5) TMI 250 - HC - GSTViolation of principles of natural justice - no personal hearing was given before making the demand - Challenge to adjudication order dated 25th August 2024 and N/N. 56/2023-Central Tax dated 28th December 2023 issued by the Central Board of Indirect Taxes and Customs - HELD THAT - The Court has perused the record. The impugned order arises from the show cause notice dated 8th December 2023. The DRC-06 Forms attached with the petition clearly reveal that sufficient opportunities were afforded to the Petitioner to file a reply. It is only upon the failure of the Petitioner to file the same that the Ld. Assistant Commissioner has proceeded to pass the impugned order confirming the demand to the tune of Rs. 35, 03, 595/-. This Court is not inclined to set aside the impugned order - petition disposed off.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court include:
2. ISSUE-WISE DETAILED ANALYSIS Validity of the Impugned Notifications under Section 168A of the CGST Act The legal framework governing the issuance of notifications extending time limits for adjudication under the CGST Act is Section 168A, which mandates that any such extension must be preceded by a recommendation of the GST Council. The Petitioner challenged both Notification No. 09/2023 and Notification No. 56/2023 on the ground that the latter was issued without prior GST Council recommendation, with ratification occurring only post issuance, thus violating statutory procedure. The Court noted a divergence in judicial opinions on this issue: the Allahabad and Patna High Courts upheld the validity of the notifications, whereas the Guwahati High Court quashed Notification No. 56/2023. The Telangana High Court expressed doubts on the validity of Notification No. 56/2023 without delving into detailed vires analysis. The Supreme Court has admitted Special Leave Petition No. 4240/2025, which raises the question of whether the time limit for adjudication under Section 73 of the GST Act could be extended via these notifications issued under Section 168A. The Supreme Court's order recognized a cleavage of opinion among High Courts and issued notice with interim relief pending final adjudication. Thus, the Court acknowledged that the validity of the impugned notifications is currently sub judice before the Supreme Court and that the issue is of significant legal importance, involving statutory interpretation and procedural compliance. Adjudication Order under Section 73 of the CGST Act The Petitioner contended that the impugned adjudication order dated 5th April, 2024 was a non-speaking order passed without affording sufficient opportunity to be heard, thereby violating principles of natural justice. The Court examined the record, including the show cause notice dated 8th December, 2023 and the DRC-06 Forms, which demonstrated that the Petitioner was afforded multiple opportunities to file a reply but failed to do so. On these facts, the Court found no merit in the contention that the order was non-speaking or passed without due opportunity. The failure to respond led to the ex-parte confirmation of demand. Consequently, the Court declined to set aside the impugned order. Relief and Procedural Accommodations Pending Supreme Court Decision While the validity of the notifications remains undecided, the Court recognized the practical difficulties faced by petitioners who were unable to file replies or attend personal hearings, resulting in ex-parte orders and significant financial demands and penalties. The Court identified six broad categories of cases and indicated a prima facie view that, depending on the category, petitioners should be allowed to place their stand before the adjudicating authority and pursue appellate remedies without prejudice to the question of the notifications' validity. The Court granted liberty to the Petitioner to file an appeal against the impugned order within 30 days, directing that such appeal would not be dismissed on limitation grounds if filed within the stipulated period and would be adjudicated on merits. The Court clarified that the appellate authority's order would remain subject to the Supreme Court's final decision on the notifications' validity. Judicial Discipline and Impact of Conflicting High Court Decisions The Court observed that multiple High Courts had issued conflicting rulings on the notifications' validity, and that the Supreme Court was seized of the matter. The Punjab and Haryana High Court had disposed of connected writ petitions by deferring to the Supreme Court's pending adjudication and refraining from expressing opinions on the vires of Section 168A or the notifications. This approach was endorsed to maintain judicial discipline and avoid conflicting outcomes pending the Supreme Court's ruling. 3. SIGNIFICANT HOLDINGS "The challenge made by the Petitioner to the notifications in the present proceedings shall also be subject to the outcome of the decision of the Supreme Court." "The DRC-06 Forms attached with the petition clearly reveal that sufficient opportunities were afforded to the Petitioner to file a reply. It is only upon the failure of the Petitioner to file the same, that the Ld. Assistant Commissioner has proceeded to pass the impugned order confirming the demand." "If the appeal along with the requisite pre-deposit provided under Section 107 of the Central Goods and Services Tax Act, 2017 is filed within a period of 30 days, the same shall not be dismissed on the ground of limitation and shall be entertained and adjudicated on merits." Core principles established include:
Final determinations:
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