Demand Order Set Aside: SCN Uploaded to Wrong Portal Tab Denied Assessee Opportunity of Hearing

By | June 5, 2025
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I. Demand Order Set Aside: SCN Uploaded to Wrong Portal Tab Denied Assessee Opportunity of Hearing

Issue:

Whether a show cause notice (SCN) and a consequent demand order are valid if the SCN and subsequent reminders were uploaded on a “wrong tab” of the GST portal (“Additional Notices Tab”), preventing the assessee from having knowledge of them and thus denying a proper opportunity to file a reply and attend a personal hearing.

Facts:

For the period March 2017 to March 2018, the assessee challenged a show cause notice (SCN) and the subsequent demand order. The assessee contended that the SCN was uploaded on the “Additional Notices Tab” of the GST portal, and therefore, it did not come to their knowledge. As a result, the impugned order was passed without providing the petitioner a personal hearing and in the absence of a reply from the petitioner.

It was found that subsequent to the impugned SCN, three reminders were also issued, but all these reminders were also uploaded on the “Additional Notices Tab.” While recent changes to the GST portal had made the “Additional Notices Tab” visible, the crucial fact remained that the original impugned SCN (and subsequent reminders) were uploaded on the wrong tab. This effectively meant the petitioner was not provided a proper opportunity to file a reply and attend a personal hearing.

Decision:

The court ruled in favor of the assessee. It permitted the petitioner to file a reply, and the matter was directed to be re-adjudicated.

Key Takeaways:

  • Effective Service of Notice: For a show cause notice to be validly served, it must be communicated in a manner that ensures the recipient has effective knowledge of it. Uploading it to a “wrong tab” on the portal, especially one that was not easily visible at the time, constitutes a failure of effective service.
  • Violation of Natural Justice: The denial of an opportunity to file a reply and attend a personal hearing is a fundamental violation of the principles of natural justice (audi alteram partem). This renders the subsequent demand order invalid.
  • Departmental Responsibility: It is the responsibility of the tax authorities to ensure that official communications, particularly those that can lead to adverse consequences for the taxpayer, are communicated through proper and accessible channels. Technical glitches or misplacement on the portal are not the assessee’s fault.
  • Remand for Fresh Adjudication: When an order is set aside due to a clear violation of natural justice, the typical remedy is to remand the matter back to the adjudicating authority for fresh consideration after providing the assessee a proper opportunity to be heard.
  • Evolution of GST Portal: The mention of “recent changes” making the “Additional Notices Tab” visible highlights the evolving nature of digital platforms and the need for retrospective consideration of procedural fairness during earlier periods when such visibility issues existed.

II. Validity of GST Demand Limitation Period Extension Notifications Subject to Supreme Court Review

Issue:

Whether the validity of Notification No. 09/2023 – Central Tax, dated 31st March 2023, issued by the Central Board of Indirect Taxes and Customs (CBIC), which extended the limitation period for assessment, is legally sound.

Facts:

For the period March 2017 to March 2018, the assessee challenged the validity of CBIC Notification No. 09/2023 – Central Tax, dated 31st March 2023. This notification, issued under Section 168A of the Central Goods and Services Tax Act, 2017, pertains to the extension of various time limits, including for assessment.

Decision:

The court noted that a similar matter concerning the central notification 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 21-2-2025). Therefore, the validity of the impugned notification was to be left open, and any order passed by the Adjudicating Authority on the merits of this case would be subject to the outcome of the Supreme Court’s decision. The matter was stayed.

Key Takeaways:

  • Sub Judice Principle: When a fundamental legal question, such as the validity of statutory notifications, is pending before the apex court, lower courts commonly defer their final decision on that specific point, making their outcome contingent on the higher court’s ruling. This ensures consistency and avoids conflicting interpretations.
  • Scope of Section 168A: The legal challenge revolves around the interpretation and application of Section 168A of the CGST Act, which grants the power to extend time limits for various compliance and enforcement actions in certain circumstances. The Supreme Court’s decision will provide definitive clarity on the extent and conditions under which such extensions are permissible.
  • Impact on Demand Orders: The validity of these notifications is crucial for numerous GST demand orders issued by tax authorities that rely on these extensions to overcome the standard limitation periods. If the notifications are held invalid, many demands might become time-barred.
  • Interim Relief for Assessee: The “matter stayed” status means that the proceedings related to the demand (specifically the aspect dependent on the validity of these notifications) are temporarily put on hold, awaiting the Supreme Court’s binding pronouncement. This offers interim relief to the assessee, but the final outcome remains contingent.
HIGH COURT OF DELHI
Suryan Technologies
v.
Sales Tax Officer
PRATHIBA M. SINGH and Rajneesh Kumar Gupta, JJ.
W.P.(C) No.6921 OF 2025
CM APPL. No.31323 OF 2025
MAY  21, 2025
R.K. Singh, Adv. for the Petitioner. Ms. Urvi Mohan, Adv. 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- M/s Suryan Technologies under Articles 226 and 227 of the Constitution of India, inter alia, assailing the Show Cause Notice dated 23rd September, 2023 (hereinafter, ‘impugned SCN’) for the tax period March 2017 to March 2018, as also the consequent order dated 06th December, 2023 (hereinafter, ‘the impugned order’)passed by the office of Sales Tax Officer Class II/ AVATO, Ward-90, Zone-8, Delhi. The petition also challenges the vires of Notification No. 09/2023- Central Tax dated 31st March, 2023 (hereinafter ‘impugned notification’).
3. The validity of the impugned notification was under consideration before this Court in a batch of petitions with the lead petition being W.P.(C) DJST Traders (P.) Ltd. v. Union of India (Delhi)/16499/2023 ‘. In the said batch of petitions, on 22nd 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 7-32025.”

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. “
4. 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 in S.L.P. No. 4240/2025 titled HCC-SEW-Meil-AAG JV v. Asstt. Commissioner of State Tax
5. On facts, however, the submission of the Petitioner is that the impugned SCN dated 23rd September, 2023 from which the impugned order arises, was uploaded on the ‘Additional Notices Tab’; therefore, the same did not come to the knowledge of the Petitioner. The impugned order dated 06th December, 2023 was passed without providing the Petitioner a personal hearing and in the absence of a reply on behalf of the Petitioner.
6. Heard. The Court has also perused the records. It is noticed that subsequent to the impugned SCN dated 23rd September, 2023 three reminders dated 13th November 2023, 22nd November, 2023 and 21st February, 2024 have also been issued. However all these reminders are uploaded on the ‘Additional Notices Tab’.
7. In fact this Court in Neelgiri Machinery v. Commissioner Delhi Goods and Service Tax(Delhi)/ W.P.(C) 13727/2024 ‘, under similar circumstances where the SCN was uploaded vide ‘Additional Notices Tab’ had remanded the matter in the following terms:
“6. Be that as it may, intention is to ensure that the Petitioner is given an opportunity to file its reply and is heard on merits and that orders are not passed in default. Since there is no clarity on behalf of the Department, this Court follows the order dated 9th September, 2024 in Satish Chand Mittal (Trade Name National Rubber Products) v. Sales Tax Officer SGST, Ward 25-Zone 1 (W.P.(C) 12589/2024; DHC) as also order dated 23rd December, 2024 in Anant Wire Industries v. Sales Tax Officers Class II/Avato, Ward 83 & Anr (W.P.(C) 17867/2024; DHC) where the Court under similar circumstances has remanded back the matter to ensure the Noticee/petitioners get a fair opportunity to be heard. The order of the Court in Sathish Chand Mittal (supra) reads as under:

“4. It is the petitioner’s case that he had not received the impugned SCN and, therefore, he had no opportunity to respond to the same. For the same reason, the petitioner claims that he had not appear for a personal hearing before the Adjudicating Authority, which was scheduled on 17.10.2023 and later rescheduled to 30.11.2023 as per the Reminder.

5. The petitioner also states that the impugned SCN, the Reminder and the impugned order are unsigned.

6. Mr. Singhvi, the learned counsel appearing for the respondent, on advance notice, fairly states that the principal issue involved in the present case is squarely covered by the decisions of this Court in M/s ACE Cardiopathy Solutions Private Ltd. v. Union of India & Ors.: Neutral Citation No. 2024:DHC:4108-DB as well as in Kamla Vohra v. Sales Tax Officer Class II/ Avato Ward 52 : Neutral Citation No.2024:DHC:5108- DB.

7. He states that possibly, the petitioner did not had the access of the Notices as they were projected on the GST Portal under the tab ‘Additional Notices & Orders’ He submits that the said issue has now been addressed and the ‘Additional Notices & Orders’ tab is placed under the general menu and adjacent to the tab ‘Notices & Orders’ 8. In view of the above, the present petition is allowed and the impugned order is set aside.

9. The respondent is granted another opportunity to reply to the impugned SCN within a period of two weeks from date. The Adjudicating Authority shall consider the same and pass such order, as it deems fit, after affording the petitioner an opportunity to be heard.

10. The present petition is disposed of in the aforesaid terms.

11. All pending applications are also disposed of.”

7. The impugned demand orders dated 23rd April, 2024 and 5th December, 2023 are accordingly set aside. In response to show cause notices dated 04th December, 2023 and 23th September, 2023, the Petitioner shall file its replies within thirty days. The hearing notices shall now not be merely uploaded on the portal but shall also be e-mailed to the Petitioner and upon the hearing notice being received, the Petitioner would appear before the Department and make its submissions. The show cause notices shall be adjudicated in accordance with law.
8. The petitions are disposed of in the above terms. The pending application(s), if any, also stand disposed of.”
8. It is relevant to note that post 16th January 2024, the Department has effected changes in the portal to ensure that the Show Cause Notices become visible to parties. However, the impugned SCN and two out of three reminders in the present case are issued prior to 16th January, 2024. Under these circumstances, though one reminder has been issued post 16th January, 2024 where the same could have been visible to the Petitioner, considering the fact that the Petitioner did not get a proper opportunity to be heard and no reply to the SCN has been filed by the Petitioner, this Court is inclined to remand this matter back to the concerned Adjudicating Authority.
9. Accordingly, the impugned order is set aside. The Petitioner is granted time till 15th July, 2025, to file the reply to the impugned SCN. Upon filing of the reply, the Adjudicating Authority shall issue a notice for personal hearing to the Petitioner. The personal hearing notice shall be communicated to the Petitioner on the following e-mail address and mobile number:
Email: singh_613@hotmail.com
Mobile No.: 9811546796
10. The reply filed by the Petitioner to the impugned SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and a fresh order with respect to the SCN shall be passed accordingly.
11. All the rights and remedies of the parties are left open. Access to the GST Portal, if not already available, shall be provided to the Petitioner to enable filing of the reply as also access to the notices and related documents.
12. However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in S.L.P No 4240/2025 titled HCC-SEW-MEIL-AAG JV (supra)
13. Petition is disposed of in these terms. All pending applications, if any, are also disposed of.