Writ Not Maintainable When Assessee Fails to Avail Granted Personal Hearing and Order Contains Reasons; Appeal is the Remedy

I. Writ Not Maintainable When Assessee Fails to Avail Granted Personal Hearing and Order Contains Reasons; Appeal is the Remedy

Issue:

Whether a writ petition is maintainable when an assessee claims they were not properly heard or that their reply was not duly considered before a demand order under Section 75 of the Central Goods and Services Tax Act, 2017 (CGST Act), was passed, but the records show that a personal hearing was granted but not availed, and the order itself provides reasons.

Facts:

A show cause notice (SCN) was issued to the assessee, leading to an impugned order. The assessee contended in a writ petition that they were not properly heard and their reply was not duly considered before the order was passed. However, a perusal of the records revealed that the assessee had indeed filed a reply to the SCN, and a personal hearing, though granted, was not availed by the assessee. The impugned order also contained clear reasons for its decision.

Decision:

The court held that in view of these circumstances, the impugned order did not warrant interference under writ jurisdiction. Therefore, the petition was disposed of, granting liberty to the assessee to avail their statutory appellate remedy under Section 107 of the CGST Act.

Key Takeaways:

• Writ Jurisdiction is Discretionary: The High Court’s extraordinary writ jurisdiction is not meant to be a substitute for available statutory appellate remedies. It is generally exercised only when there’s a fundamental violation of natural justice (e.g., no opportunity of hearing) or a jurisdictional error.
• Assessee’s Responsibility to Avail Hearing: When a personal hearing is duly granted by the adjudicating authority, it is the assessee’s responsibility to avail that opportunity. Failure to do so, especially when a reply has already been filed, undermines the claim of not being heard.
• Speaking Order: The fact that the impugned order provided “clear reasons” indicates that the adjudicating authority applied its mind to the case, including the assessee’s reply, even if it found the reply unsatisfactory. This distinguishes it from orders passed without any consideration.
• Adequate Alternate Remedy (Section 107): Section 107 of the CGST Act provides a robust appellate mechanism where factual and legal errors can be challenged. The court will typically direct the assessee to exhaust this remedy before considering a writ petition.

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

Issue:

Whether the validity of Notification No. 9/2023-Central Tax, issued by the Central Board of Indirect Taxes and Customs (CBIC), is legally sound, particularly concerning its impact on the limitation period for GST demands.

Facts:

The assessee challenged the validity of CBIC Notification No. 9/2023-Central Tax, dated 31-03-2023. This notification, typically issued under Section 168A of the Central Goods and Services Tax Act, 2017, pertains to the extension of various time limits, which often affects the limitation period for issuing demand orders under provisions like Section 73.

Decision:

The court noted that a similar matter concerning the validity of these notifications was already 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 21-02-2025). 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:

• Judicial Deference: Lower courts commonly defer to the Supreme Court when a fundamental question of law, such as the validity of statutory notifications, is under the apex court’s consideration. This ensures consistency in interpretation and application of law across the country.
• Impact of Section 168A Notifications: Notifications issued under Section 168A play a crucial role in extending statutory time limits, particularly in circumstances like the COVID-19 pandemic. Their validity directly impacts whether certain tax demands or other compliance actions are considered time-barred or validly initiated.
• Matter Stayed: The reference to the matter being “stayed” implies that the proceedings related to the demand (specifically those aspects contingent on the validity of the notification) are put on hold, awaiting the Supreme Court’s authoritative pronouncement. This provides interim relief to the assessee, but the final outcome is uncertain.
• Importance of Supreme Court’s Ruling: The Supreme Court’s decision in HCC-SEW-MEIL-AAG JV will have widespread implications for numerous GST demand cases across the country that rely on these extended limitation periods.