2025 (7) TMI 1323 - HC - GST

Challenge to N/N. 56/2023-Central Tax dated 28th December 2023 and N/N. 56/2023-State Tax dated 11th July 2024 - extension of time limit for adjudication - HELD THAT - The validity of the impugned notifications was under consideration before this Court in a batch of petitions with the lead petition in DJST TRADERS PRIVATE LIMITED VERSUS UNION OF INDIA ORS. 2025 (5) TMI 377 - DELHI HIGH COURT . In the said batch of petitions the parties were heard at length qua the validity of the impugned notification and accordingly it was held that A perusal of the record reveals that a reply to the SCN was filed by the Petitioner on 08th October 2023. However no supporting documents were filed. Subsequently the order dated 31st December 2023 has been passed which also appears to be quite sketchy. In the present case the submission of the Petitioner on facts is that the SCN dated 4th December 2023 from which the impugned order arises was uploaded on the Additional Notices Tab . Therefore the same was not brought to the knowledge of the Petitioner due to which no reply was filed. Hence the impugned order was passed without providing the Petitioner with an opportunity to challenge the case on merits. 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 4th December 2023 and the same was not brought to the notice of the Petitioner. Under such circumstances despite the fact that a reminder notice was issued 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. The impugned order is set aside. The Petitioner is granted time till 31st August 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 - Petition allowed by way of remand.

Summary

ISSUES:

Whether the impugned Notifications Nos. 56/2023-Central Tax and 56/2023-State Tax are valid, particularly regarding compliance with Section 168A of the Central Goods and Services Tax Act, 2017 (GST Act).Whether the extension of time limits for adjudication under Section 73 of the GST Act and SGST Act for the financial year 2019-2020 by these Notifications was lawful.Whether the procedural requirement of prior recommendation by the GST Council was followed before issuance of the impugned notifications.Whether the issuance of the State Tax Notification No. 56/2023 after expiry of limitation under Notification No. 13 of 2022 (State Tax) is valid.Whether the petitioner was denied a fair opportunity of hearing due to the show cause notice (SCN) being uploaded under the 'Additional Notices Tab' on the GST Portal, thereby affecting the right to be heard.Whether orders passed ex-parte without providing personal hearings and opportunity to file replies are legally sustainable.

RULINGS / HOLDINGS:

The validity of Notification No. 56/2023-Central Tax is under challenge as it was issued "contrary to the mandate under Section 168A" with ratification given subsequent to issuance, and the notification incorrectly states it was on the recommendation of the GST Council.Notification No. 56/2023-State Tax was issued after the expiry of the limitation period under Notification No. 13 of 2022 (State Tax), raising validity issues.Various High Courts have taken divergent views on the validity of these notifications; the matter is currently pending before the Supreme Court for final adjudication.Where the SCN was uploaded on the 'Additional Notices Tab' and not brought to the petitioner's notice, the petitioner was effectively denied an opportunity to file a reply or appear for personal hearing; such orders passed ex-parte are set aside.In such cases, the matter must be remanded to the Adjudicating Authority to afford the petitioner an opportunity to file replies and be heard, with personal hearing notices communicated via email and mobile in addition to portal upload.Access to the GST Portal shall be provided to the petitioner to enable uploading of replies and access to notices and related documents.The issue of validity of the impugned notifications is expressly left open and subject to the outcome of the Supreme Court's decision in the pending S.L.P. No. 4240/2025 and this Court's decision in W.P.(C) 9214/2024.

RATIONALE:

The Court applied the statutory framework under Section 168A of the Central Goods and Services Tax Act, 2017, which mandates prior recommendation of the GST Council before extending deadlines for adjudication.The Court noted conflicting High Court decisions on the validity of the notifications, highlighting a cleavage of opinion and the need for Supreme Court's authoritative ruling.The principle of natural justice, particularly the right to be heard, was emphasized, holding that notices must be effectively communicated and personal hearings granted before passing orders.The Court relied on its earlier precedents where similar procedural defects (uploading SCNs under 'Additional Notices Tab' without adequate notice) led to remand of matters to ensure fair opportunity to the parties.The Court refrained from deciding the validity of the impugned notifications at this stage, deferring to the Supreme Court's pending decision and related ongoing proceedings.