9911796707🚨 Important Update for Our Users
We are transitioning to our new and improved portal - www.taxtmi.com - for a better experience.
Follow us:
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (6) TMI 738 - HC - GSTChallenge to SCN - validity and vires of N/N. 9/2023-Central Tax dated 31st March 2023 and related notifications issued u/s 168A of the Central Goods and Services Tax Act 2017 - extension of time limits for adjudication of SCN and passing of orders u/s 73 of the GST Act - HELD THAT - In fact this Court in Neelgiri Machinery through its Proprietor Mr. Anil Kumar V. Commissioner Delhi Goods And Service Tax And Others 2025 (3) TMI 1308 - DELHI HIGH COURT under similar circumstances where the SCN was uploaded on the Additional Notices Tab had remanded the matter where it was held that The impugned demand orders dated 23rd April 2024 and 5th December 2023 are accordingly set aside. In response to show cause notices dated 04th December 2023 and 23th September 2023 the Petitioner shall file its replies within thirty days. The hearing notices shall now not be merely uploaded on the portal but shall also be e-mailed to the Petitioner and upon the hearing notice being received the Petitioner would appear before the Department and make its submissions. 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 29th September 2023 and the same was not brought 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. Petition disposed off by way of remand.
Issues Presented and Considered
The core legal questions considered by the Court include:
Issue-wise Detailed Analysis 1. Validity of Notifications under Section 168A of the GST Act Legal Framework and Precedents: Section 168A of the GST Act empowers the government to extend the time limits for adjudication of show cause notices and passing of orders. The issuance of notifications under this section requires prior recommendation of the GST Council. The validity of such notifications has been challenged in multiple High Courts, resulting in divergent judicial opinions:
Court's Interpretation and Reasoning: The Court noted the conflicting views among various High Courts and acknowledged that the ultimate determination on the validity of the notifications rests with the Supreme Court, which has issued notices and is hearing the Special Leave Petition (SLP No. 4240/2025). The Court prudently refrained from expressing any opinion on the vires of the notifications, adhering to judicial discipline and respecting the ongoing apex court proceedings. Application of Law to Facts: Given the pendency of the Supreme Court's decision, the Court held that the question of the validity of the impugned notifications remains open and subject to the outcome of the apex court's ruling. 2. Procedural Fairness and Service of Show Cause Notice Legal Framework and Precedents: Principles of natural justice require that the party against whom adverse action is contemplated must be given adequate notice and a fair opportunity to present their case. Prior decisions of this Court, including in W.P.(C) 13727/2024 and other cited cases (e.g., M/s ACE Cardiopathy Solutions Private Ltd. v. Union of India & Ors.), have emphasized that orders should not be passed ex-parte without proper service and opportunity to be heard. Court's Interpretation and Reasoning: The Court observed that the show cause notice dated 29th September 2023 was uploaded on the GST portal under the 'Additional Notices Tab', which was not prominently visible or brought to the petitioner's attention. Consequently, the petitioner was unaware of the notice and did not file any reply. The Court noted that the Department's practice of uploading notices in this manner effectively denied the petitioner a fair opportunity to respond or appear for personal hearings, leading to ex-parte orders and imposition of demands and penalties. Key Evidence and Findings: The petitioner's submissions and the record showed that the reminder notice dated 2nd November 2023 was similarly uploaded under the 'Additional Notices Tab' and not communicated effectively. The Court also referred to changes made to the GST portal after 16th January 2024 to improve visibility of such notices, but these changes were not applicable at the time the SCN was issued. Application of Law to Facts: The Court applied principles of natural justice and prior judicial pronouncements to conclude that the petitioner was denied a proper opportunity to be heard. The impugned orders based on the SCN were therefore set aside, and the matter was remanded to the adjudicating authority to provide the petitioner a fair chance to file replies and be heard. Treatment of Competing Arguments: While the Department argued that the notices were uploaded on the portal, the Court found that mere uploading under a less visible tab did not constitute valid service. The Department's acknowledgment of the issue and subsequent portal improvements supported the petitioner's contention. 3. Impact of Pending Supreme Court Proceedings on Adjudication Legal Framework and Precedents: The Court recognized that the Supreme Court is currently seized of the question regarding the validity of the notifications under Section 168A of the GST Act. It is a settled principle that lower courts should not pre-empt or contradict the apex court's pending adjudication on substantial questions of law. Court's Interpretation and Reasoning: The Court explicitly stated that the validity of the impugned notifications is left open and any order passed by the adjudicating authority shall be subject to the Supreme Court's final decision. The Court also noted interim orders passed by other High Courts and the Supreme Court's directions, emphasizing judicial discipline and restraint. Application of Law to Facts: The Court disposed of the writ petition with the condition that all rights and remedies remain open, and that the adjudicating authority's fresh order would be subject to the Supreme Court's ruling in SLP No. 4240/2025. 4. Directions for Fair Opportunity and Procedural Compliance Court's Reasoning and Orders: To ensure compliance with principles of natural justice, the Court directed the following:
The Court emphasized that these procedural safeguards are necessary irrespective of the ultimate validity of the notifications, to ensure that adjudication is conducted fairly and in accordance with law. Significant Holdings "The Court is of the prima facie view that, depending upon the categories of petitions, orders can be passed affording an opportunity to the Petitioners to place their stand before the adjudicating authority. In some cases, proceedings including appellate remedies may be permitted to be pursued by the Petitioners, without delving into the question of the validity of the said notifications at this stage." "The impugned order is set aside. The Petitioner is granted time till 10th July 2025, to file the reply to the SCN. Upon filing of the reply, the Adjudicating Authority shall issue a notice for personal hearing to the Petitioner. The personal hearing notice shall be communicated to the Petitioner on the following mobile no. and e-mail address." "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 S.L.P No 4240/2025." "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." Core principles established include:
Final determinations on each issue were that the impugned show cause notice and consequential orders were set aside due to lack of proper service and opportunity to be heard; the petitioner was granted time and opportunity to respond; and the validity of the impugned notifications remains subject to the Supreme Court's decision.
|
