Delhi HC Sets Aside GST Demand Passed Without Proper Notice or Hearing

Case Details:

• Case Name: M/s Keshav Metals Through Proprietor Shri Sunil Khandelwal v. Commissioner of Delhi Goods and Services Tax & Ors.

• Court: High Court of Delhi

• Petition Number: W.P.(C) 5741/2025

• Date of Judgement: 01 May 2025

• Relevant Sections: Article 226 of the Constitution of India; Section 73 & 168A of CGST Act, 2017

• Category of Dispute: Natural Justice – Validity of Notice & Opportunity of Hearing; Challenge to GST Notifications No. 56/2023 (State Tax)

• Bench: Justice Prathiba M. Singh, Justice Rajneesh Kumar Gupta

Facts of the Case

(Ref. Paras 3–7)

1. The petitioner challenged the order dated 11.08.2024 arising from a Show Cause Notice (SCN) dated 21.05.2024, demanding ₹1,35,99,517/- in GST.

2. The SCN was allegedly undated, unsigned, and never received physically by the petitioner; it was only uploaded under the “Additional Notices” tab on the GST portal, which the petitioner was unaware of.

3. The petitioner also challenged Notification No. 56/2023 (State Tax) on procedural grounds under Section 168A, stating it was issued after limitation and without proper GST Council recommendation.

4. Similar challenges to these notifications are already pending before the Supreme Court in SLP No. 4240/2025 arising from conflicting High Court rulings.

5. No personal hearing was granted to the petitioner, and the order was passed ex-parte.

Question(s) in Consideration

(Ref. Paras 5–6, 9–12)

1. Whether the impugned Notification No. 56/2023 (State Tax) was validly issued under Section 168A of the CGST Act.

2. Whether the demand order dated 11.08.2024 was liable to be set aside for violation of principles of natural justice due to lack of notice visibility and denial of a personal hearing.

Observation of the Court

(Ref. Paras 6–12)

1. The validity of Notification No. 56/2023 is pending before the Supreme Court; hence, the court refrained from ruling on its merits.

2. The SCN was uploaded under “Additional Notices” tab, a known issue addressed in earlier cases such as Neelgiri Machinery, Satish Chand Mittal, and Anant Wire Industries, where similar orders were set aside.

3. The GST portal interface issue (placement of Additional Notices) was rectified post 16.01.2024, but fairness still required giving the petitioner an opportunity to respond.

4. Denial of a personal hearing and lack of clarity in service of SCN amounted to breach of natural justice principles.

Judgement of the Court

(Ref. Paras 9–13)

1. The impugned order dated 11.08.2024 was set aside.

2. The petitioner was granted 30 days to file a reply to the SCN.

3. The adjudicating authority was directed to give a personal hearing and send hearing notices to the petitioner’s email.

4. The issue of notification validity was kept open, subject to the Supreme Court’s final decision in SLP No. 4240/2025.

Between Fine Lines (Simplified Summary in 5 Lines)

• GST demand of ₹1.36 crore was set aside due to procedural lapses.

• SCN was hidden in the GST portal’s “Additional Notices” tab, so the petitioner didn’t see it.

• No personal hearing was granted before passing the order.

• Delhi HC remanded the matter for fresh adjudication after reply and hearing.

• Validity of the challenged notification will depend on the Supreme Court’s decision.

Summary of Referred Cases

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