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2025 (5) TMI 1202 - HC - GSTExtension of time limit of issuance of SCN u/s 73 / 74 - validity and vires of Notification No. 56/2023-Central Tax Notification No. 9/2023-Central Tax and Notification No. 56/2023-State Tax - procedural requirements under Section 168A for prior to the issuance of notifications - No knowledge of the issuance of SCN - Challenging the SCN and impugned order - HELD THAT - There is no doubt that after 16th January 2024 changes have been made to the GST portal and the Additional Notices Tab has been made visible. However in the present case the SCN was issued on 8th December 2023 and the same may not have come to the notice of the Petitioner. Under such circumstances considering the fact that the Petitioner did not get a proper opportunity to be heard and no reply to the SCN has been filed by the Petitioner the matter deserves to be remanded back to the concerned Adjudicating Authority. Accordingly 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 fresh order with respect to the SCN shall be passed accordingly. However it is made clear that the issue in respect of the validity of the impugned notifications 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. and of this Court in Engineers India Limited v. Union of India 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 in above terms.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court include:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of the Impugned Notifications under Section 168A of the GST Act Legal Framework and Precedents: Section 168A of the GST Act mandates that any extension of time limits for adjudication of show cause notices must be made on the prior recommendation of the GST Council. The impugned notifications purportedly extend such deadlines. Various High Courts have taken divergent views on the validity of these notifications. The Allahabad High Court upheld Notification No. 9/2023 (Central Tax), while the Patna High Court upheld Notification No. 56/2023 (Central Tax). Conversely, the Guwahati High Court quashed Notification No. 56/2023 (Central Tax). The Telangana High Court made observations on the invalidity of Notification No. 56/2023 without deciding the vires. The Supreme Court has admitted Special Leave Petitions (SLP No. 4240/2025) to resolve these conflicting views. Court's Interpretation and Reasoning: The Court recognized the cleavage of opinion among various High Courts and acknowledged that the matter is presently sub judice before the Supreme Court. It refrained from expressing any opinion on the validity of the impugned notifications, deferring to the Supreme Court's ultimate determination. Application of Law to Facts: The Court noted that the impugned notifications were issued without strict adherence to the procedural mandate of prior GST Council recommendation in at least one instance (Notification No. 56/2023 Central Tax), where ratification was given post issuance, thereby raising questions on validity. Treatment of Competing Arguments: The Court noted the submissions challenging the notifications on procedural grounds and the counter submissions supported by judicial precedents upholding the notifications. However, it emphasized judicial discipline and deferred to the Supreme Court's pending adjudication. Conclusion: The Court left the issue of validity open, subject to the Supreme Court's decision, and directed that any orders passed by the adjudicating authorities would be subject to the outcome of the SLP. Issue 2: Procedural Fairness in Service and Adjudication of the Show Cause Notice (SCN) Legal Framework and Precedents: Principles of natural justice and statutory procedural safeguards under the GST Act require that a show cause notice be properly served and the recipient be given a fair opportunity to file a reply and be heard before any adverse order is passed. Precedents cited include decisions where courts have remanded matters where notices were not properly communicated or where adjudication orders were passed ex-parte due to non-receipt of notices. Court's Interpretation and Reasoning: The Court found that the SCN dated 8th December 2023 was uploaded on the GST portal under the 'Additional Notices Tab', which was not prominently visible or brought to the petitioner's attention at the relevant time. Consequently, the petitioner did not receive effective notice and was deprived of the opportunity to file a reply or appear for personal hearings. The Court relied on earlier decisions where similar circumstances led to remand of matters to ensure fair opportunity to the parties. It noted that after 16th January 2024, changes were made to the GST portal to make the 'Additional Notices Tab' more visible, but this did not assist the petitioner whose SCN predated this change. Key Evidence and Findings: The petitioner's inability to access the SCN and related hearing notices due to their placement under the less visible 'Additional Notices Tab' was a critical factual finding. The Court also noted that impugned orders were passed without the petitioner filing replies or attending hearings. Application of Law to Facts: The Court applied principles of natural justice and procedural fairness to conclude that the impugned order was liable to be set aside and the matter remanded for fresh adjudication after proper service and opportunity to be heard. Treatment of Competing Arguments: The Department's argument that the SCN was uploaded on the portal and thus served was rejected as insufficient, given the lack of prominence and notification to the petitioner. The Court emphasized that mere uploading without effective communication does not satisfy the requirement of notice. Conclusion: The Court set aside the impugned order and directed that the petitioner be given an opportunity to file replies and appear for personal hearings, with notices to be communicated not only via the portal but also by email and mobile communication. Issue 3: Impact of Pending Supreme Court Proceedings on Adjudication Legal Framework and Precedents: It is a settled principle that where a higher court has admitted a matter involving substantial questions of law, lower courts generally refrain from deciding the same issues to maintain judicial discipline and avoid conflicting decisions. Court's Interpretation and Reasoning: The Court noted the pendency of the Supreme Court proceedings (SLP No. 4240/2025) concerning the validity of the impugned notifications and the extension of time limits under Section 168A of the GST Act. It observed that various High Courts have taken differing views and that the Supreme Court's decision will be binding. Application of Law to Facts: The Court disposed of several connected petitions with the direction that the validity of the impugned notifications would be subject to the Supreme Court's decision. It also directed that interim orders passed in related matters would continue to operate until the Supreme Court's final adjudication. Conclusion: The Court refrained from deciding on the validity of the impugned notifications and left the issue open pending the Supreme Court's ruling. Issue 4: Remedies and Reliefs Pending Final Adjudication Court's Reasoning: The Court acknowledged that even if the impugned notifications were ultimately upheld, the petitioner had been prejudiced by the lack of opportunity to respond to the SCN and attend hearings. Therefore, it proposed that the petitioner be allowed to file replies and pursue appellate remedies without prejudice to the validity of the notifications. The Court emphasized that orders passed ex-parte without affording a hearing would be set aside and remanded for fresh adjudication in accordance with law. Conclusion: The Court granted the petitioner time till 10th July 2025 to file replies to the SCN, directed that hearing notices be communicated effectively, and mandated fresh adjudication after hearing the petitioner. All rights and remedies of the parties were kept open. 3. SIGNIFICANT HOLDINGS The Court made the following crucial legal determinations and observations:
Core principles established include:
Final determinations were that the impugned order arising from the SCN dated 8th December 2023 be set aside for lack of proper notice and opportunity to be heard; the petitioner be granted time to file replies and attend hearings; the validity of the impugned notifications remain open pending Supreme Court's decision; and all rights and remedies of the parties be preserved.
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