Writ Not Maintainable When Appealable Order Shows Due Consideration and Personal Hearing

By | June 3, 2025
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I. Writ Not Maintainable When Appealable Order Shows Due Consideration and Personal Hearing

Issue:

Whether a writ petition challenging a summary show cause notice and summary order passed under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act), is maintainable on the ground that the assessee’s reply was not duly considered, even when the record indicates otherwise and an appellate remedy is available.

Facts:

The petitioner-assessee challenged a summary show cause notice and a summary order issued under Section 73 of the CGST Act, 2017. The primary contention was that the impugned order was passed without proper consideration of the reply filed by the assessee. However, upon review, it was found that a reply had indeed been filed, and a personal hearing was granted, with the proprietor of the petitioner appearing before the adjudicating authority. Furthermore, the impugned order itself provided clear reasons for its issuance, indicating that the assessee’s reply was duly considered.

Decision:

The court held that since the assessee’s reply was duly considered and a personal hearing was granted, the impugned order was appealable under Section 107 of the CGST Act. Consequently, the matter did not warrant interference under writ jurisdiction.

Key Takeaways:

  • Availability of Alternate Remedy: The existence of an effective alternative remedy, such as an appeal under Section 107 of the CGST Act, generally precludes the exercise of writ jurisdiction.
  • Compliance with Natural Justice: When the adjudicating authority demonstrates that it has considered the assessee’s reply and provided a personal hearing, the principles of natural justice are deemed to have been observed.
  • Reasons in Order: The provision of clear reasons in the impugned order indicates due application of mind by the adjudicating authority to the facts and submissions, including the assessee’s reply.
  • Limited Scope of Writ: Writ jurisdiction is extraordinary and is typically invoked only in cases of fundamental rights violations, clear lack of jurisdiction, or patent illegality where no efficacious alternate remedy exists.

II. Validity of GST Limitation Period Extension Notifications Sub Judice Before Supreme Court

Issue:

Whether the validity of CBIC Notification No. 56/2023-Central Tax, dated 28-12-2023, and corresponding state notifications (likely extending limitation periods for demand orders under Section 168A of the CGST Act) is legally sound.

Facts:

The assessee challenged the validity of CBIC Notification No. 56/2023-Central Tax, dated 28-12-2023, and its corresponding state notification. These notifications are typically issued under Section 168A of the CGST Act, which allows for extensions of time limits in cases of force majeure or other specified circumstances. The legality of such extensions often centers on whether the conditions for invoking Section 168A were met and if the extensions were within the permissible legal framework.

Decision:

The court noted that the matter concerning the validity of these notifications was already pending consideration before the Supreme Court in S.L.P. No. 4240/2025, dated 21-2-2025. Therefore, the challenge made by the assessee to the notification in the present proceedings would be subject to the outcome of the Supreme Court’s decision.

Key Takeaways:

  • Doctrine of Sub Judice: When a legal issue is already pending adjudication before a higher court, particularly the Supreme Court, lower courts generally defer their decision on that specific point, making their outcome contingent on the higher court’s ruling.
  • Legal Uncertainty of Extensions: The challenge to these notifications indicates ongoing legal scrutiny regarding the power of the CBIC to extend limitation periods for demand and recovery proceedings under GST. The final word on the validity of these extensions rests with the Supreme Court.
  • Impact on Assessees: For assessees whose demand notices or orders fall within these extended periods, the final liability will hinge on the Supreme Court’s judgment on the validity of these notifications. Until then, their cases are effectively stayed or proceeded with subject to the higher court’s decision.
  • Section 168A: This case highlights the practical application and legal challenges related to Section 168A, which is a critical provision for managing time limits in exceptional circumstances within the GST regime.
HIGH COURT OF DELHI
Krishna Traders
v.
Govt of NCT of Delhi
PRATHIBA M. SINGH and Rajneesh Kumar Gupta, JJ.
W.P.(C) No. 6494 OF 2025
CM APPL. No. 29589 OF 2025
MAY  15, 2025
M.A. Ansari and Ms.Tabbassum Firdause, Advs. for the Petitioner. Harpreet Singh, Sr. Standing Counsel, Ms. Suhani Mathur, Jai Ahuja and Awadhesh Kumar Singh, 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 Article 226 of the Constitution of India, inter alia, challenging the following –
(i)summary of Show Cause Notice in form DRC-01 dated 15th December 2023, (hereinafter, ‘the impugned SCN’); and
(ii)the summary order dated 29th April, 2024 (hereinafter, ‘the impugned order’) passed by the Sales Tax Officer Class II/AVATO, Ward 32, Zone 1, Delhi (hereinafter ‘Respondent-Department’) under Section 73 of the Delhi/Central Goods and Services Tax Act, 2017 vide which a demand to the tune of Rs. 1,53,66,782/- has been confirmed.
3. This petition also challenges Notification Nos.56/2023-State Tax dated 11th July, 2024 and Notification Nos.56/2023-Central Tax dated 28th December, 2023 (hereinafter ‘impugned notifications’);
4. The impugned notifications were under consideration before this Court in a batch of matters with the lead matter being DJST Traders (P.) Ltd. v. Union of India (Delhi)/W.P.(C) 16499/2023 On the last date of hearing i.e. , 22rd 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 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 73-2025.”

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. “
5. Thereafter, on 23rd April, 2025, this Court, having noted that the validity of the impugned notifications is under consideration before the Supreme Court, had disposed of several matters in the said batch of petitions after addressing other factual issues raised in the respective petitions. Additionally, while disposing of the said petitions, this Court clearly observed that the validity of the impugned notifications therein shall be subject to the outcome of the proceedings before the Supreme Court.
6. 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]‘.
7. On facts, the submission of the Petitioner is that the impugned Show Cause Notice (SCN) dated 15th December, 2023 has been issued on the grounds that Input Tax Credit (ITC) was claimed on the basis of transactions with (i) dealers whose GST registrations have been cancelled, and (ii) dealers who are alleged defaulters in filing returns and non-payment of tax. It is submitted that the Petitioner filed a detailed reply to the SCN on 15th January, 2024. However, the impugned order has been passed without due consideration of the said reply.
8. Heard the parties. The Court has also perused the records. It is noticed that the reply has been filed and even the Personal hearing has also been granted in this matter and the proprietor of the Petitioner has appeared before the Adjudicating Authority. The impugned order has also given clear reasons as to why the order is being passed and in the opinion of the Court, has duly considered the reply. The relevant portion of the impugned order is extracted below:
9. In view of the above circumstances, and considering the fact the impugned order is appealable under Section 107 of the Central Goods and Services Tax Act, 2017, this Court is of the opinion that the impugned order does not warrant interference under the writ jurisdiction.
10. However, considering the fact that the challenge to the validity of the impugned notifications are still pending before the Supreme Court, the Petitioner is permitted to file an appeal before the concerned Appellate Authority by 15th July, 2025. If the appeal is filed by 15th July, 2025 along with the prescribed pre-deposit the appeal shall not be disposed on the grounds of limitation, and shall be heard on merits.
11. All rights and remedies of the parties are left open. Access to the GST portal, if not already available, shall be ensured to be provided to the Petitioner to enable access to notices and related documents.
12. However, it is made clear that the issue in respect of the validity of impugned notifications is left open and the order of the Appellate Authority shall be subject to the outcome of the decision of the 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] as also of this Court in W.P.(C) 9214/2024 titled ‘Engineers India Limited (supra)
13. The petition is disposed of in these terms. All pending applications, if any, are also disposed of.