An ex-parte order is invalid if the Show Cause Notice was uploaded to the 'Additional Notices Tab' on the GST portal

An ex-parte order is invalid if the Show Cause Notice was uploaded to the ‘Additional Notices Tab’ on the GST portal, thereby denying a proper opportunity of hearing.

Issue

Whether a Show Cause Notice (SCN) is considered to be validly served if it is uploaded to the ‘Additional Notices Tab’ on the GST portal, and can an ex-parte demand order passed in consequence be sustained?
What is the current status of the legal challenge to Notification No. 9/2023-Central Tax, dated March 31, 2023, which extended the limitation period for issuing orders for the financial year 2017-18?

Facts

The assessee filed a writ petition challenging both a Show Cause Notice (SCN) and the subsequent ex-parte demand order for the financial year 2017-18. The primary grievance was that the SCN was uploaded by the tax authorities onto the ‘Additional Notices Tab’ of the GST portal. Due to this, the assessee contended that the notice never came to their knowledge. As a result, they could not file a reply or appear for a personal hearing, leading to an ex-parte order being passed against them.

Concurrently, the assessee also challenged the constitutional validity of Notification No. 9/2023-Central Tax. This notification, issued under Section 168A of the CGST Act, extended the time limit for the tax authorities to pass adjudication orders for the financial year 2017-18. The assessee argued that the demand order was time-barred if the extension was held to be invalid.

Decision

The High Court granted relief to the assessee on the ground of violation of natural justice, while keeping the larger legal question of the notification’s validity pending.

Improper Service of Notice: The Court acknowledged that while recent changes might have made the ‘Additional Notices Tab’ more visible on the GST portal, the fact remains that at the relevant time, it was not the designated place for primary notices. It held that uploading the SCN to this tab did not constitute proper service of notice. This failure deprived the petitioner of a reasonable opportunity to file a reply and be heard. Consequently, the Court set aside the impugned ex-parte order and permitted the petitioner to file a reply to the SCN, directing the matter to be re-adjudicated after affording a proper hearing.
Challenge to Notification: Regarding the challenge to Notification No. 9/2023-Central Tax, the Court noted that the issue of its validity is already pending consideration before the Supreme Court of India. Therefore, the Court ruled that the outcome of the assessee’s challenge in the present proceedings would be subject to the final decision rendered by the Supreme Court in the pending matters.

Key Takeaways

Proper Service is Non-Negotiable: Uploading notices to an incorrect or less visible tab on the GST portal does not meet the standard of proper service required by law. The taxpayer cannot be faulted for not noticing a communication that is not placed in its designated location.
Violation of Natural Justice: Passing an ex-parte order without ensuring proper service of the SCN is a clear violation of the principles of natural justice (audi alteram partem) and is liable to be set aside.
Validity of Limitation Extension is Sub Judice: The constitutional validity of Notification No. 9/2023-CT (and other related notifications under Section 168A) extending limitation periods is a widespread issue currently pending before the Supreme Court. The decisions of High Courts on this issue are contingent on the final judgment of the Apex Court.
Two-Tiered Judicial Approach: Courts are adopting a pragmatic approach in such cases: immediate relief is granted on clear procedural violations (like improper service), while the larger question of law (like the validity of a notification) is kept pending to await the authoritative ruling from the Supreme Court.

HIGH COURT OF DELHI

Landmark Traders (P.) Ltd.

Union of India

PRATHIBA M. SINGH and Rajneesh Kumar Gupta, JJ.

W.P.(C) No. 7162 of 2025
CM APPL. Nos. 32302 & 32303 of 2025

MAY 23, 2025

Nitin Gulati, Adv. for the Petitioner. Ajay Jain, SPC, Kunal Sharma, Manoj Gautam, Krishna Sharma, Ruchesh Sinha, Ms. Urvi Mohan, Mrs. Bijay Lakshmi and M N Mishra, 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 challenging the show cause notice dated 29th September, 2023 (hereinafter, ‘the SCN’) issued by the Department of Trade & Taxes, Government of N.C.T. of Delhi, pertaining to the Financial Year 2017-18, as also the consequent order dated 2nd December, 2023 passed by the office of Sales Tax Officer Class II/ AVATO, Delhi (hereinafter, ‘the impugned order’).

3. The petition also challenges the vires of Notification No. 9/2023-Central Tax dated 31st March, 2023 (hereinafter ‘impugned notification’).

4. The validity of the impugned notification was under consideration before this Court in a batch of petitions with the lead petition being DJST Traders (P.) Ltd. v. Union of India 16499/2023. In the said batch of petitions, 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. 09and56of2023 (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 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 7-32025.”

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. “

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 in HCC-SEW-Meil-AAG JV v. Assistant Commissioner of State Tax

6. In the present case, the submission of the Petitioner, on facts is that the SCN dated 29th September, 2023, from which the impugned order arises, was uploaded on the ‘Additional Notices Tab’. Therefore, the same was not brought to the knowledge of the Petitioner due to which no reply was filed. Thereafter, a reminder notice was also issued to the Petitioner on 2nd November, 2023, which is also stated to be uploaded on the ‘Additional Notices Tab’. Hence, the impugned order was passed without providing the Petitioner with an opportunity to challenge the case on merits.

7. The Court has heard the parties. In fact, this Court in ‘Neelgiri Machinery through its Proprietor Mr. Anil Kumar v. Commissioner Delhi Goods and Service Tax 13727/2024 under similar circumstances where the SCN was uploaded on the ‘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 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 ‘AdditionalNotices & 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 emailed 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. There is no doubt that after 16th January 2024, changes have been made to the GST portal and the ‘Additional Notices Tab’ has been made visible. However, in the present case, the SCN was issued on 29th September, 2023 and the same was not brought to the notice of the Petitioner. Under such circumstances, 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, the matter deserves to be remanded back to the concerned Adjudicating Authority.

9. Accordingly, the impugned order is set aside. The Petitioner is granted time till 10th July 2025, to file the reply to the 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 mobile no. and e-mail address:

Email ID: nit.gulati@yahoo. com

Mobile: 9313133000

10. The reply filed by the Petitioner to the 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. 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 HCC-SEW-Meil-AAG JV (supra). .

12. All rights and remedies of the parties are left open. Access to the GST Portal, shall be provided to the Petitioner to enable uploading of the reply as also access to the notices and related documents.

13. The present writ petition is disposed ofin above terms. All the pending applications, if any, are also disposed of.