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2025 (5) TMI 1186 - HC - GSTExtension of time limit of issuance of SCN u/s 73 / 74 - Form GST DRC-07 - Validity of Notification 56/2023 (Central Tax) and Notification 09/2023 (Central Tax) - procedural requirements under Section 168A for prior to the issuance of notifications - registration cancelled as the firm was non-existent - Challenging the SCN and impugned order - HELD THAT - A perusal of the record reveals that the order has considered the reply and noted that the supplier s registration itself was cancelled as the firm was non-existent. Considering the fact that the reply has been considered a personal hearing was granted and the impugned order is an appealable order under Section 107 of Central Goods and Services Tax Act 2017( CGST Act ) the Court is of the opinion that the order does not warrant interference under the writ jurisdiction. Accordingly the Petitioner is permitted to file an appeal under Section 107 of the CGST Act along with the prescribed pre-deposit by 10th July 2025. Considering the present petition has been pending before this Court if the appeal is filed within the stipulated time the Appellate Authority shall not dismiss the appeal on limitation and shall hear the Petitioner on merits. All the rights and remedies of the parties are left open. Access to the GST Portal if not already available shall be ensured to be provided to the Petitioner to enable filing of reply as also access to the notices and related documents. However it is made clear that the issue in respect of the validity of the impugned notifications is left open and the order of the Appellate Authority shall be subject to the outcome of the decision of the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax Ors . 2025 (4) TMI 60 - SC ORDER . Petition is disposed of in the above terms.
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 Legal Framework and Precedents: Section 168A of the CGST Act empowers the Central Government to extend the time limit for issuance of show cause notices and completion of adjudication proceedings beyond the prescribed period, subject to prior recommendation of the GST Council. The impugned notifications 09/2023 and 56/2023 were issued purportedly under this provision to extend limitation periods for adjudication of GST demands for FY 2019-20. Several High Courts have taken divergent views on the validity of these notifications. The Allahabad High Court upheld Notification No. 9/2023, the Patna High Court upheld Notification No. 56/2023, while the Guwahati High Court quashed Notification No. 56/2023. The Telangana High Court expressed reservations about Notification No. 56/2023's validity, and this issue is presently under consideration by the Supreme Court in SLP No. 4240/2025. Court's Interpretation and Reasoning: The Court noted the conflicting judicial opinions and acknowledged that the matter was sub judice before the Supreme Court. It observed that Notification No. 56/2023 was challenged on the ground that it was issued without prior recommendation of the GST Council, with ratification occurring only after issuance, contrary to the mandate of Section 168A. The Court also referred to the Punjab and Haryana High Court's decision to refrain from expressing an opinion on the validity of Section 168A and the notifications, deferring to the Supreme Court's forthcoming ruling. Application of Law to Facts: Given the ongoing Supreme Court proceedings and the judicial divergence, the Court refrained from adjudicating the validity of the impugned notifications. It emphasized that the outcome of the Supreme Court's decision would be binding on the parties and the Court itself. Treatment of Competing Arguments: The Petitioner challenged the notifications' validity, while the Respondents relied on the notifications to sustain the extension of limitation for adjudication. The Court balanced the competing views by deferring the issue to the Supreme Court, thereby maintaining judicial discipline and avoiding conflicting rulings. Conclusion: The Court left the question of the notifications' validity open, subject to the Supreme Court's final adjudication. Validity of the Impugned Show Cause Notice and Adjudication Order Legal Framework and Precedents: Under the CGST Act, issuance of a show cause notice and adjudication orders must comply with principles of natural justice, including providing the taxpayer an opportunity to be heard and consider their replies. Section 107 of the CGST Act provides the remedy of appeal against such orders. Court's Interpretation and Reasoning: The Petitioner contended that despite filing a reply on 27th June 2024, it was neither considered nor was a personal hearing granted before passing the impugned order. The Court examined the record and found that a personal hearing was fixed on 28th June 2024. The impugned order explicitly noted the Petitioner's reply and reasons for disagreement, including reliance on a precedent from the Kolkata High Court affirming the validity of Input Tax Credit (ITC) despite retrospective cancellation of supplier registration. The adjudicating authority, however, rejected the reply on the basis that the supplier's registration was cancelled due to the non-existence of the firm, thus justifying the demand. The Court found that the reply was considered and a personal hearing was granted, negating the Petitioner's claim of procedural denial. Application of Law to Facts: Since the order was passed after considering the Petitioner's reply and affording a personal hearing, the Court held that the impugned order did not warrant interference under writ jurisdiction. Treatment of Competing Arguments: The Petitioner's argument of non-consideration and denial of hearing was countered by the adjudicating authority's record. The Court accepted the latter, emphasizing procedural compliance. Conclusion: The impugned order was held to be valid and appealable under Section 107 of the CGST Act. Opportunity for Appeal and Interim Reliefs The Court permitted the Petitioner to file an appeal under Section 107 of the CGST Act along with the prescribed pre-deposit by 10th July, 2025. It directed that if the appeal was filed within the stipulated time, the Appellate Authority would not dismiss it on the ground of limitation and would hear the Petitioner on merits. The Court also mandated that the Petitioner be provided access to the GST Portal to enable filing of replies and access to notices and related documents. The Court clarified that all rights and remedies of the parties were left open and that the appellate proceedings would be subject to the Supreme Court's final decision on the validity of the impugned notifications. 3. SIGNIFICANT HOLDINGS The Court's crucial legal reasoning includes the following verbatim excerpts:
Core principles established include:
Final determinations:
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