Detailed GST Demand Order Passed After Considering Reply: Appeal is the Proper Remedy.

I. Detailed GST demand order is not subject to writ interference if some demands were dropped after considering the reply; appeal is the proper remedy.

II. Challenge to GST limitation extension notifications is stayed pending Supreme Court’s decision.

I. Detailed GST Demand Order Passed After Considering Reply: Appeal is the Proper Remedy.

Issue:

Whether a writ petition challenging an adjudication order passed under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017), should be entertained on the ground that the assessee’s reply to the show cause notice (SCN) was not duly considered, even if the impugned order is detailed and shows that some demands were dropped.

Facts:

• Pursuant to the issuance of a show cause notice (SCN), an impugned adjudication order was passed under Section 73.
• The assessee challenged this order in a writ petition, claiming that although they had filed a reply to the SCN, it was not duly considered before the impugned order was passed.
• Upon perusal of the records, the court noted that the impugned order was “a detailed order” and had been passed “considering various aspects.”
• Significantly, the court observed that “some of the demands, in fact, had been dropped upon considering the reply of the assessee.”

Decision I:

The court held in favor of the revenue. It concluded that, in view of the detailed nature of the impugned order and the fact that some demands were dropped after considering the assessee’s reply, the order did not warrant interference in writ jurisdiction. The instant petition was disposed of with permission to the assessee to file an appeal under Section 107 of the CGST/DGST Act, 2017.

Key Takeaways I:

• Speaking Order and Due Consideration: A “speaking order” (a reasoned order) that addresses various aspects and even drops some demands demonstrates that the adjudicating authority has applied its mind and considered the assessee’s submissions. This negates a general allegation of “non-consideration of reply.”
• Substantial Compliance with Natural Justice: When an authority issues a detailed order and acts upon some of the points raised in the assessee’s reply (by dropping demands), it shows substantial compliance with the principles of natural justice (right to be heard and consideration of submissions).
• Writ Jurisdiction vs. Appellate Jurisdiction: High Courts are reluctant to exercise their extraordinary writ jurisdiction to re-examine facts or the merits of an order, especially when a statutory appellate remedy is available. The appellate authority (under Section 107) is the appropriate forum to challenge the factual findings and legal conclusions of the primary order.
• Presumption of Correctness: A detailed and reasoned order carries a presumption of correctness. To challenge it via a writ, the assessee would need to demonstrate a fundamental procedural error or lack of jurisdiction, not merely a disagreement on facts or appreciation of evidence.

II. Challenge to GST Limitation Extension Notifications Stayed Pending Supreme Court Decision.

Issue:

Whether a High Court should proceed with a challenge to the validity of Notification No. 9/2023-Central Tax, dated March 31, 2023, and Notification No. 56/2023-Central Tax, dated December 28, 2023 (issued by the Central Board of Indirect Taxes and Customs (CBIC) under Section 168A of the CGST Act, 2017, for extending limitation periods), when the same legal question is pending consideration before the Supreme Court.

Facts II:

• The assessee challenged the validity of two Central Tax Notifications:
  • Notification No. 9/2023-Central Tax, dated March 31, 2023.
  • Notification No. 56/2023-Central Tax, dated December 28, 2023.
• These notifications were issued under Section 168A of the CGST Act, 2017, and extended various limitation periods.
• It was brought to the court’s attention that the larger issue of the validity of such notifications extending limitation periods was pending consideration before the Supreme Court in HCC-SEW-MEIL-AAG JV v. Asstt. Commissioner of State Tax [S.L.P. No. 4240 of 2025, dated February 21, 2025].

Decision II:

The court ruled that the challenge made by the assessee to the notifications in the present proceedings would be subject to the outcome of the decision of the Supreme Court, as the matter was pending consideration before the apex court. The matter was effectively stayed on this point.

Key Takeaways II:

• Judicial Propriety: High Courts generally defer to the Supreme Court on questions of law that are already sub judice before the apex court. This ensures judicial discipline and consistency.
• Significance of Section 168A: This section provides extraordinary powers to the government to extend deadlines, which has significant implications for taxpayers. The validity of such extensions is a critical legal question.
• Stay of Proceedings: The court’s decision to “stay” the challenge means that the High Court will not issue a ruling on the validity of these notifications until the Supreme Court provides its judgment. This is a procedural relief for the assessee, keeping their challenge alive.
• Outcome Dependent on Supreme Court: The ultimate fate of the assessee’s challenge to the limitation extensions will depend entirely on the Supreme Court’s verdict in the referenced S.L.P.