Writ petition against GST demand order is dismissed as assessee received multiple hearing opportunities

By | June 3, 2025
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I. Writ petition against GST demand order is dismissed as assessee received multiple hearing opportunities and an appeal is available.

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

I. Writ Petition Against GST Demand Order Dismissed; Assessee Directed to Avail Appellate Remedy After Multiple Hearings.

Issue:

Whether a writ petition challenging a GST demand order passed under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017), should be entertained when the assessee duly received the show cause notice (SCN), was granted and attended repeated personal hearings, and an efficacious alternate remedy of appeal is available.

Facts:

  • For the period 2018-19, pursuant to the issuance of a show cause notice (SCN), an impugned order in original was passed under Section 73.
  • The assessee challenged this order via a writ petition.
  • It was noted by the court that:
    1. The SCN was “duly applied by assessee” (meaning, presumably, the assessee was aware of it or responded to it).
    2. “Repeated personal hearings were granted to assessee.”
    3. The assessee attended the hearing, and the impugned order was passed based on these proceedings.

Decision I:

The court held in favor of the revenue. Considering the facts and circumstances (i.e., due SCN awareness, repeated hearings granted, and attendance by assessee), the impugned order did not warrant interference in writ jurisdiction. Accordingly, the instant petition was disposed of with liberty to the assessee to avail the appellate remedy under Section 107 of the CGST/DGST Act, 2017.

Key Takeaways I:

  • Exhaustion of Alternate Remedy: This case strongly reiterates the principle that writ jurisdiction is extraordinary and should not be invoked when an effective alternate statutory remedy (an appeal under Section 107) is available.
  • Full Opportunity of Hearing: When the assessee has been afforded multiple opportunities for personal hearing and has actually attended them, it conclusively demonstrates that the principles of natural justice have been fully complied with. There is no basis to claim a denial of opportunity.
  • Merits to Appellate Authority: Disputes regarding the factual findings or the legal conclusions of the demand order are to be agitated before the Appellate Authority, which is equipped to review the merits of the case.
  • No Procedural Flaw Found: The court found no procedural infirmity or violation of natural justice that would justify interference in writ jurisdiction. The department acted within its powers and followed due process.
  • “In favour of revenue”: The dismissal of the writ petition means the revenue’s process is upheld, and the assessee must pursue the next level of statutory appeal.

II. Challenge to GST Limitation Extension Notification Stayed Pending Supreme Court’s Decision.

Issue:

Whether a High Court should proceed with a challenge to the validity of Notification No. 9/2023-State Tax (issued for extending limitation periods), when the same legal question is already pending consideration before the Supreme Court.

Facts II:

  • The assessee challenged the validity of Notification No. 9/2023-State Tax.
  • This notification (presumably issued under Section 168A of the CGST Act, 2017, and its state counterpart) extended various limitation periods.
  • It was brought to the court’s attention that a similar matter 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 held that the challenge made by the assessee to the notification in the present proceedings would be subject to the outcome of the decision of the Supreme Court, as the similar matter was pending before the apex court. This implies a stay on this particular aspect of the writ petition.

Key Takeaways II:

  • Judicial Comity and Restraint: High Courts consistently defer to the Supreme Court on questions of law that are already under its consideration. This ensures uniformity in legal interpretation and efficient use of judicial resources.
  • Significance of Limitation Extensions: Notifications extending limitation periods, particularly under Section 168A, are crucial for taxpayers as they impact the finality of assessments. Their legal validity is a substantial question of law.
  • “Subject to Outcome”: This means the High Court did not dismiss the assessee’s challenge to the notification outright but rather kept it alive, making its resolution contingent upon the Supreme Court’s ruling. This is a procedural relief for the assessee.
  • Impact of Supreme Court Decision: The Supreme Court’s verdict on the validity of such notifications will have a binding effect on all courts and tax authorities, determining the validity of assessment orders passed within these extended periods.
  • “Partly in favour of assessee/Matter stayed”: While the outcome of the stay is a procedural win for the assessee (as their challenge is not dismissed), it’s important to note that it’s not a definitive ruling on the merits of the notification’s validity.
HIGH COURT OF DELHI
Aays Exim
v.
Union of India
PRATHIBA M. SINGH and Rajneesh Kumar Gupta, JJ.
W.P.(C) No. 6290 of 2024
CM APPL. No. 26217 of 2024
MAY  5, 2025.
K.G. Gopalakrishnan, Ms. Nisha Mohandas and Kunwar Raj Singh, Advs. for the Petitioner. Anurag Ojha, SSC, Subham Kr. and Dipak Raj, Advs. for the Respondent.
ORDER
Prathiba M. Singh, J.- This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner under Articles 226 and 227 of the Constitution of India inter alia challenging the impugned Show Cause Notice dated 5th December, 2023 issued for the year 2018-19 and impugned order dated 10th March, 2024 issued by the Respondent No. 4-Sales Tax Officer, Class II/AVATO, ward 77, Zone 7, Delhi under section 73 of the Delhi Goods & Service Tax Act, 2017 (hereinafter ‘the DGST Act’).
3. The petition also challenges the vires of Notification No. 09/2023-State Tax dated 22nd June, 2023 (hereinafter ‘impugned notification’).
4. The impugned notification was under consideration before this Court in a batch of matters with the lead matter being DJST Traders (P.) Ltd. v. Union of IndiaW.P.(C) 16499/2023 on 22nd April, 2025, the parties were heard at length qua the validity of the impugned notification and accordingly, the following order was passed:
“4. Submissions have been heard in part. The broad challenge to both sets of Notifications is on the ground that the proper procedure was not followed prior to the issuance of the same. In terms of Section 168A, prior recommendation of the GST Council is essential for extending deadlines. In respect of Notification no.9, the recommendation was made prior to the issuance of the same. However, insofar as Notification No. 56/2023 (Central Tax) the challenge is that the extension was granted contrary to the mandate under Section 168A of the Central Goods and Services Tax Act, 2017 and ratification was given subsequent to the issuance of the notification. The notification incorrectly states that it was on the recommendation of the GST Council. Insofar as the Notification No. 56 of 2023 (State Tax) is concerned, the challenge is to the effect that the same was issued on 11th July, 2024 after the expiry of the limitation in terms of the Notification No.13 of 2022 (State Tax).
5. In fact, Notification Nos. 09 and 56 of 2023 (Central Tax) were challenged before various other High Courts. The Allahabad Court has upheld the validity of Notification no.9. The Patna High Court has upheld the validity of Notification no.56. Whereas, the Guwahati High Court has quashed Notification No. 56 of 2023 (Central Tax).
6. The Telangana High Court while not delving into the vires of the assailed notifications, made certain observations in respect of invalidity of Notification No. 56 of 2023 (Central Tax). This judgment of the Telangana High Court is now presently under consideration by the Supreme Court in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. The Supreme Court vide order dated 21st February, 2025, passed the following order in the said case:

“1. The subject matter of challenge before the High Court was to the legality, validity and propriety of the Notification No.13/2022 dated 5-7-2022 & Notification Nos.9 and 56 of 2023 dated 31-3-2023 & 8-12-2023 respectively.

2. However, in the present petition, we are concerned with Notification Nos.9 & 56/2023 dated 31-3-2023 respectively.

3. These Notifications have been issued in the purported exercise of power under Section 168 (A) of the Central Goods and Services Tax Act. 2017 (for short, the “GST Act”).

4. We have heard Dr. S. Muralidhar, the learned Senior counsel appearing for the petitioner.

5. The issue that falls for the consideration of this Court is whether the time limit for adjudication of show cause notice and passing order under Section 73 of the GST Act and SGST Act (Telangana GST Act) for financial year 2019-2020 could have been extended by issuing the Notifications in question under Section 168-A of the GST Act.

6. There are many other issues also arising for consideration in this matter.

7. Dr. Muralidhar pointed out that there is a cleavage of opinion amongst different High Courts of the country. 8. Issue notice on the SLP as also on the prayer for interim relief, returnable on 7-3-2025.”

7. In the meantime, the challenges were also pending before the Bombay High Court and the Punjab and Haryana High Court. In the Punjab and Haryana High Court vide order dated 12th March, 2025, all the writ petitions have been disposed of in terms of the interim orders passed therein. The operative portion of the said order reads as under:

“65. Almost all the issues, which have been raised before us in these present connected cases and have been noticed hereinabove, are the subject matter of the Hon’ble Supreme Court in the aforesaid SLP.

66. Keeping in view the judicial discipline, we refrain from giving our opinion with respect to the vires of Section 168-A oftheActas well as the notifications issued in purported exercise of power under Section 168-A of the Act which have been challenged, and we direct that all these present connected cases shall be governed by the judgment passed by the Hon’ble Supreme Court and the decision thereto shall be binding on these cases too.

67. Since the matter is pending before the Hon’ble Supreme Court, the interim order passed in the present cases, would continue to operate and would be governed by the final adjudication by the Supreme Court on the issues in the aforesaid SLP-4240-2025.

68. In view of the aforesaid, all these connected cases are disposed of accordingly along with pending applications, if any.”

8. The Court has heard Id. Counsels for the parties for a substantial period today. A perusal of the above would show that various High Courts have taken a view and the matter is squarely now pending before the Supreme Court.
9. Apart from the challenge to the notifications itself, various counsels submit that even if the same are upheld, they would still pray for relief for the parties as the Petitioners have been unable to file replies due to several reasons and were unable to avail of personal hearings in most cases. In effect therefore in most cases the adjudication orders are passed ex-parte. Huge demands have been raised and even penalties have been imposed.
10. Broadly, there are six categories of cases which are pending before this Court. While the issue concerning the validity of the impugned notifications is presently under consideration before the Supreme Court, this 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.
11. The said categories and proposed reliefs have been broadly put to the parties today. They may seek instructions and revert by tomorrow i.e., 23rd April, 2025. “
5. Subsequently, this Court, having noted that the validity of the central notifications—Notification Nos. 56/2023-CT and 09/2023-CT—is presently under consideration before the Hon’ble Supreme Court in HCC-SEW-MEIL-AAG JV v. Asstt. Commissioner of State Tax [S.L.P No. 4240 of 2025, dated 21-2-2025] had disposed of matters wherein challenge was limited to the central notifications, after addressing other factual issues raised in the respective petitions, with a direction that such matters would remain subject to the outcome of the proceedings before the Supreme Court. However, in cases where the challenge is to the parallel State Notifications, the same have been retained for consideration by this Court. The lead matter in the said batch is Engineers India Limited v. Union of India [W.P.(C) 9214 of 2024, dated 23-4-2025]. Considering the fact that the present petition challenges state notification, the same shall be subject to the outcome of the decisions of the Supreme Court and this Court in the aforementioned matters.
6. Further, on facts, it is noticed that the Show Cause Notice was duly replied to by the Petitioner on 20th February, 2024. Repeated personal hearings were granted to the Petitioner on 15th January, 2024 & 22nd February, 2024. The Petitioner had also attended second hearing based on which the impugned order has been passed on 10th March, 2024.
7. Considering these circumstances the Court is of the opinion that the impugned order dated 10th March, 2024 does not warrant interference. Accordingly the petition is disposed of with the liberty to the Petitioner to avail of its appellate remedy under Section 107 of the DGST Act. If the appeal is filed within two months along with pre-deposit, the appeal shall not be dismissed on the ground of limitation and shall be heard on merits.
8. However, it is made clear that the issue in respect of the validity of the impugned notification is left open and the order of the appellate authority shall be subject to the outcome of the decision of the Supreme Court and this Court.
9. Access to the GST Portal, if not already available, shall be ensured to be provided to the Petitioner to enable access to the notices and related documents.
10. The petition is disposed of in the above terms. Pending applications, if any, shall also be disposed of.