Court’s Decision
The Delhi High Court disposed of the writ petition challenging a demand order and Show Cause Notice under the CGST Act, 2017, permitting the petitioner to file an appeal before the Appellate Authority by 10th July 2025. The Court clarified that the validity of Notification No. 09/2023-Central Tax remains open and shall be subject to the final decision of the Supreme Court in SLP No. 4240/2025.
“Let the Petitioner file an appeal before the Appellate Authority along with pre-deposit by 10th July, 2025… Any order passed by the Appellate Authority shall be subject to the outcome of the decision of the Supreme Court.”
Facts
The petitioner challenged:
- A Show Cause Notice dated 27th September 2023.
- A consequent demand order dated 26th December 2023 passed by the Sales Tax Officer, Delhi (Respondent No. 2).
- The vires of Notification No. 09/2023-Central Tax dated 31st March 2023.
The petitioner had filed a reply on 26th October 2023 but did not appear for the personal hearing, resulting in an ex-parte order.
Issues
- Whether the demand order passed without personal hearing is sustainable.
- Whether Notification No. 09/2023-Central Tax is valid and enforceable.
- Whether the petitioner is entitled to appeal despite the ex-parte adjudication.
Petitioner’s Arguments
- Challenged the legality and validity of Notification No. 09/2023-Central Tax.
- Contended that proper procedure under Section 168A of the CGST Act was not followed before issuing the notification.
- Argued that the adjudication order was passed ex-parte despite their reply being on record.
Respondent’s Arguments
- Argued that the petitioner was given an opportunity for personal hearing but failed to appear.
- Asserted that the demand order was passed as per due process.
- Supported the validity of Notification No. 09/2023 as having been made on GST Council’s recommendation.
Analysis of the Law
The Court examined the applicability of Section 168A of the CGST Act, which requires recommendations from the GST Council for extension of timelines. The validity of Notification No. 09/2023 was previously challenged on grounds that procedural requirements were not fully met.
However, the Court refrained from delving into the validity issue since the matter is pending before the Supreme Court. It noted that several High Courts had taken divergent views on the validity of similar notifications, further justifying judicial restraint.
Precedent Analysis
- Allahabad High Court upheld the validity of Notification No. 09/2023.
- Patna High Court upheld Notification No. 56/2023.
- Guwahati High Court quashed Notification No. 56/2023.
- Telangana High Court raised concerns regarding Notification No. 56/2023, now under consideration by the Supreme Court.
- Punjab & Haryana High Court refrained from ruling on validity and made interim orders subject to the outcome of the Supreme Court.
“Keeping in view the judicial discipline, we refrain from giving our opinion with respect to the vires… the decision thereto shall be binding on these cases too.”
Court’s Reasoning
Recognising that the petitioner had submitted a written reply but failed to attend the personal hearing, the Court held that an appeal before the Appellate Authority would offer sufficient opportunity to remedy the ex-parte order. The Court acknowledged the petitioner’s right to due process, especially in light of ongoing constitutional challenges.
“Depending upon the categories of petitions, orders can be passed affording an opportunity to the Petitioners to place their stand before the adjudicating authority.”
The Court also considered that it had, in similar batch matters, already granted limited relief allowing appeals without deciding the vires of the notification.
Conclusion
The petition was disposed of with liberty to the petitioner to file an appeal by 10th July 2025. The outcome of any such appeal would be subject to the Supreme Court’s verdict in the pending SLP concerning the impugned notifications.
Implications
- The Delhi High Court’s order preserves the petitioner’s right to appellate remedy without delving into the constitutional validity of the GST notifications.
- It aligns with the approach of other High Courts deferring to the Supreme Court in light of the SLP on Notification Nos. 09 and 56 of 2023.
- The case underscores the procedural obligations under Section 168A of the CGST Act and highlights the increasing judicial scrutiny over GST Council recommendations and their implementation.
