A court may grant extended time to file an appeal despite the taxpayer's non-compliance.

A court may grant extended time to file an appeal despite the taxpayer’s non-compliance.

Issue

Should a taxpayer who failed to reply to a show-cause notice, attend a hearing, and file a timely appeal be granted an opportunity by a High Court to pursue the statutory appellate remedy belatedly?

Facts

The assessee received a show-cause notice (SCN) from the GST department.
The assessee neither filed a reply to the SCN nor attended the scheduled personal hearing.
Consequently, an adverse order was passed. The assessee then failed to file a statutory appeal against this order within the prescribed time limit.
Much later, after the time for filing an appeal had expired, the assessee filed a writ petition before the High Court challenging the SCN and the order.

Decision

The High Court’s decision was partly in favour of the assessee.

It noted that the proper remedy was an appeal and that the writ petition was filed late.
However, taking an equitable view and considering that the initial notice might have been missed due to inadvertence, the court exercised its discretion.
Instead of dismissing the petition, the court permitted the assessee to avail the appellate remedy, granting them a fresh window to file their appeal by a new, specified date (October 31, 2025).

Key Takeways

Alternate Remedy is the Proper Route: The judgment reinforces the principle that when a statute provides for a clear appellate mechanism, the taxpayer should follow that route instead of directly approaching the High Court with a writ petition.
Judicial Discretion and Equity: High Courts sometimes exercise their writ jurisdiction to grant equitable relief, even when a taxpayer has been negligent. They can grant a fresh opportunity to pursue a statutory remedy if the alternative would be a complete denial of justice for a potentially inadvertent error.
Consequences of Non-Compliance: While the court was lenient here, the case highlights the risks of ignoring notices and deadlines. The taxpayer had to go all the way to the High Court to get a second chance that could have been avoided by timely action.

A challenge to the GST limitation extension was stayed pending a Supreme Court decision.

Issue

What is the course of action for a High Court when a writ petition challenges the validity of government notifications, and the very same legal issue is already pending for adjudication before the Supreme Court?

Facts

The assessee, in its writ petition, challenged the constitutional and legal validity of several notifications issued by the CBIC. These notifications had extended the time limit for the tax department to issue orders under Section 73 of the CGST Act for the period 2017-18. The assessee argued these extensions were illegal.

Decision

The High Court stayed the proceedings on this specific legal question.

It noted that an identical challenge to the validity of these notifications was already pending consideration before the Supreme Court in another case.
To maintain judicial discipline and avoid conflicting judgments, the High Court ruled that its own decision on this matter would be subject to the final outcome of the case before the Supreme Court.

Key Takeways

Judicial Hierarchy and Discipline: When a legal issue of national importance is pending before the Supreme Court, High Courts will typically stay their own proceedings on the same issue or make their orders subject to the Supreme Court’s final verdict.
Binding Nature of Supreme Court Decisions: The law laid down by the Supreme Court is binding on all courts and authorities in India. It is therefore logical for a High Court to await the final, binding judgment rather than rendering a decision that might be immediately overturned.

HIGH COURT OF DELHI

National Aluminium Company Ltd.

Commissioner of Delhi Goods and Service Tax

PRATHIBA M. SINGH and SHAIL JAIN, JJ.

W.P.(C) No. 13946 OF 2025
CM APPL. Nos. 57097 and 57098 OF 2025

SEPTEMBER 10, 2025

Ramanand Roy, Adv. for the Petitioner. Ms. Vaishali Gupta, Adv. for the Respondent.

JUDGMENT

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 order dated 13^th August, 2024 (hereinafter, ‘impugned order’) passed by the Office of Sales Tax Officer II/AVATO for the Financial Year 2019-20. Vide the impugned order, a demand of Rs. 32,31,595/- has been raised against the Petitioner.

3. The impugned order arises out of the Show Cause Notice (hereinafter, ‘SCN’) dated 7^th May, 2024. A reminder dated 18^th July, 2024 was also issued to the Petitioner. The Petitioner did not file a reply to the SCN nor attended the personal hearing.

4. Ms. Gupta, ld. Counsel for the Respondent objects to entertaining of the present writ on the ground that the time to file an appeal assailing the impugned order has also lapsed.

5. Ld. Counsel for the Petitioner submits that the Petitioner is a Public Sector Undertaking and had missed the SCN and hence, a reply to the SCN was not filed.

6. Heard. The challenge in the present petition is similar to a batch of petitions wherein interalia, the following notifications were challenged:

•

Notification No. 9/2023- Central Tax dated 31^st March 2023 and;

•

Notification No. 9/2023- State Tax dated 22^nd June 2023

•

Notification No.56/2023- Central Tax dated 28th December, 2023;

•

Notification No.56/2023- State Tax dated 11th July, 2024 (hereinafter, ‘the impugned notifications’).

7. DJST Traders (P.) Ltd. v. UOI 191 (Delhi)/W.P.(C) No. 16499/2023 was the lead matter in the said batch of petitions. On 22^nd April 2025, the parties were heard at length qua the validity of the impugned notifications 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 HCC-SEW-Meil-AAG JV v. Assistant Commissioner of State Tax 1080 (SC)/S.L.P No 4240/2025. 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 of the Act as 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. “

8. The abovementioned writ petition and various other writ petitions have been disposed of by this Court on subsequent dates, either remanding the matters or relegating the parties to avail of their appellate remedies, depending upon the factual situation. All such orders are subject to further orders of the Supreme Court.

9. As observed by this Court in the order dated 22^nd April 2025 as well, since the challenge to the above mentioned notifications are presently under consideration before the Supreme Court in HCC-SEW-Meil-AAG JV v. Assistant Commissioner of State Tax 1080 (SC)/S.L.P No 4240/2025, the challenge made by the Petitioner to the impugned notifications in the present proceedings shall also be subject to the outcome of the decision of the Supreme Court.

10. 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 Ltd v. UOI [W.P. (C) No. 9214 of 2024, dated 23-4-2025].

11. The impugned order is an appealable order. The present writ petition is also belated and has been filed much after the limitation period has expired.

12. Though the Petitioner has not challenged the above notifications, it is a matter of which judicial notice can be taken that the validity of the same is pending adjudication. Other similarly placed parties have been given benefit of either remand or have been permitted to file appeals, in several cases where the Notifications were challenged. The Petitioner ought not to be treated differently. The Petitioner is a PSU and considering the overall circumstances, that the SCN may have been missed due to inadvertence, this Court is inclined to permit the Petitioner to avail of the appellate remedy. If the appeal is filed along with the requisite pre-deposit by 31^st October, 2025, the same shall not be dismissed on the ground of limitation and shall be adjudicated on merits.

13. The Petitioner shall present its case in the appeal itself along with all the relevant documents.

14. The petition is disposed of in these terms. Pending applications, if any, are also disposed of.