9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (5) TMI 1195 - HC - GSTExtension of time limit of issuance of SCN u/s 73 / 74 - Validity and vires of Notification No. 56/2023-Central Tax - procedural requirements under Section 168A for prior to the issuance of notification - No knowledge of the issuance of the SCN - Cancellation of GST Registration - Challenging the SCN and impugned order - HELD THAT - This Court is of the opinion that since the Petitioner has not had an opportunity to file a reply. In addition it has not been afforded an opportunity to be heard and the impugned order has been passed without a contest on merits. Accordingly the impugned order is set aside. The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and a fresh order with respect to the SCN shall be passed. However it is made clear that the issue in respect of the validity of the impugned notification is left open. Any order passed by the Adjudicating 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 . All rights and remedies of the parties are left open. Access to the GST Portal shall be provided to the Petitioner to enable uploading of the reply as also access to the notices and related documents. The present writ petition is disposed of
Issues Presented and Considered
The core legal questions considered by the Court in this matter include:
Issue-Wise Detailed Analysis 1. Validity of Notification No. 56/2023-Central Tax under Section 168A of the GST Act Legal Framework and Precedents: Section 168A of the GST Act mandates that any extension of the time limit for adjudication of show cause notices and passing of orders must be based on a prior recommendation of the GST Council. The impugned Notification No. 56/2023 purportedly extended such deadlines but was challenged on the ground that it was issued without prior recommendation and the ratification was given only subsequent to issuance, thereby violating the statutory mandate. Various High Courts have taken divergent views on this issue. The Allahabad and Patna High Courts upheld the validity of the impugned notifications, whereas the Guwahati High Court quashed Notification No. 56/2023 (Central Tax). The Telangana High Court made observations on the invalidity of the notification but did not conclusively decide the issue. The Supreme Court has admitted Special Leave Petitions (SLPs), including SLP No. 4240/2025, to consider the legality and validity of these notifications. The Supreme Court's order dated 21st February, 2025 highlights the cleavage of opinion among High Courts and has issued notice with interim relief, indicating the issue is sub judice. Court's Interpretation and Reasoning: The Delhi High Court noted the conflicting judicial opinions and the pendency of the matter before the Supreme Court. It refrained from expressing any opinion on the validity of the impugned notification, deferring the issue to the Supreme Court's final adjudication. The Court acknowledged the procedural irregularity alleged by the Petitioner but emphasized judicial discipline and the binding nature of the Supreme Court's forthcoming decision. Application of Law to Facts: Given the ongoing litigation and the absence of a conclusive ruling from the apex court, the Delhi High Court chose not to decide the validity of the impugned notification. Instead, it proceeded to address the procedural fairness concerns raised by the Petitioner in the present case. Treatment of Competing Arguments: The Petitioner challenged the notification's validity, while the Respondents relied on the notification's purported issuance under statutory powers. The Court balanced these arguments by deferring the substantive validity issue to the Supreme Court, thereby maintaining the status quo and judicial discipline. Conclusion: The validity of Notification No. 56/2023 (Central Tax) remains an open question, pending the Supreme Court's decision in SLP No. 4240/2025. 2. Procedural Fairness in Adjudication of Show Cause Notice and Passing of Impugned Order Legal Framework and Precedents: Principles of natural justice require that a party against whom adverse orders are proposed must be given a reasonable opportunity to be heard, including the right to file a reply to the show cause notice and to participate in personal hearings before the adjudicating authority. Key Evidence and Findings: The Petitioner contended that the show cause notice dated 30th May, 2024 was not served effectively as the Petitioner's GST registration was cancelled on 24th March, 2021, resulting in no access to the GST portal and, consequently, no knowledge of the SCN or subsequent proceedings. The Petitioner also asserted that no personal hearing opportunity was afforded before the impugned order was passed, which was non-speaking and ex-parte in nature. Court's Interpretation and Reasoning: The Court found merit in the Petitioner's submissions regarding lack of opportunity to file a reply and absence of personal hearing. The Court emphasized that the impugned order was passed without contest on merits and without affording the Petitioner a chance to be heard, which is contrary to the principles of natural justice. Application of Law to Facts: The Court set aside the impugned order and granted the Petitioner time until 10th July, 2025, to file a reply to the show cause notice. The Court directed the adjudicating authority to issue a personal hearing notice to the Petitioner, ensuring communication through specified mobile number and email address. The adjudicating authority was mandated to consider the Petitioner's reply and submissions made during the personal hearing before passing a fresh order. Treatment of Competing Arguments: While the Respondents may have contended that the adjudication proceeded as per law, the Court prioritized procedural fairness and the right to be heard over the procedural lapses alleged by the Petitioner. The Court's approach balances the Respondents' interest in enforcement with the Petitioner's right to fair adjudication. Conclusion: The impugned order was set aside for violation of natural justice, and the Petitioner was afforded an opportunity to participate in the adjudication process afresh. 3. Effect of Cancellation of GST Registration and Access to GST Portal Legal Framework: Access to the GST portal is essential for taxpayers to receive notices and file replies. Cancellation of GST registration typically results in loss of access, which can impede a taxpayer's ability to participate in proceedings. Findings and Court's Reasoning: The Petitioner's GST registration cancellation on 24th March, 2021, resulted in no access to the GST portal, thereby preventing knowledge of the SCN and related documents. The Court recognized this factual impediment and directed that access to the GST portal be restored to the Petitioner to enable uploading of replies and access to relevant notices and documents. Application: This direction ensures that the Petitioner's right to be heard is not thwarted by technical or procedural barriers arising from registration cancellation. Conclusion: The Court mandated restoration of GST portal access to the Petitioner for effective participation in the proceedings. 4. Impact of Pending Supreme Court Proceedings and Judicial Discipline Legal Framework: When a matter is pending before the Supreme Court, lower courts generally refrain from expressing opinions on the issues before the apex court, adhering to principles of judicial discipline and hierarchy. Court's Reasoning: The Court noted that several High Courts have taken divergent views on the validity of the impugned notifications and that the Supreme Court has admitted the matter for final adjudication. The Delhi High Court accordingly refrained from deciding on the validity of the notification and directed that the outcome of the Supreme Court's decision would be binding on the parties. Application: The Court disposed of the writ petition subject to the outcome of the Supreme Court proceedings, keeping all rights and remedies open for the parties. Conclusion: The Court maintained the status quo and deferred substantive adjudication on the validity of the notifications pending Supreme Court's final decision. Significant Holdings "The impugned order is set aside. The Petitioner is granted time till 10th July 2025, to file the reply to SCN. Upon filing of the reply, the Adjudicating Authority shall issue a notice for personal hearing to the Petitioner." "The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and a fresh order with respect to the SCN shall be passed." "However, it is made clear that the issue in respect of the validity of the impugned notification is left open. Any order passed by the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in S.L.P No 4240/2025." "Access to the GST Portal shall be provided to the Petitioner to enable uploading of the reply as also access to the notices and related documents." Core Principles Established:
Final Determinations on Each Issue:
|
