The Delhi High Court, in M/s Koenig Solutions Pvt. Limited v. Assistant Commissioner, Audit Branch, State GST, Government of NCT of Delhi & Others, examined the validity of GST proceedings initiated for Financial Year 2018-19 after the prescribed statutory period for passing an adjudication order had expired. The decision dated 9 July 2026 reiterates the importance of limitation in GST adjudication and the legal consequences of failing to complete proceedings within the extended deadline.
The petitioner had challenged a communication dated 24 August 2023 issued in Form GST ADT-03 for conducting a special audit, as well as a DRC-01 dated 1 August 2024. The petitioner contended that the special audit proceedings were contrary to Section 66 of the Central Goods and Services Tax Act, 2017 and the corresponding Delhi GST provisions. It was also argued that the DRC-01 was unsigned and had been issued without a proper show cause notice under Section 73.
The principal issue considered by the Court was whether the GST authorities could continue the proceedings when no adjudication order had been passed within the permissible period. The petitioner relied upon Notification No. 56/2023, under which the time limit for passing the relevant order had been extended only up to 30 April 2024.
During the hearing, the respondents did not dispute that no order had been passed by the competent authority before 30 April 2024. In view of this admitted factual position, the Delhi High Court held that the proceedings could not survive after the expiry of the statutory deadline.
Accordingly, the Court allowed the writ petition and quashed the communication dated 24 August 2023 issued in Form GST ADT-03 for Financial Year 2018-19. For the same reason, the DRC-01 dated 1 August 2024 was also quashed. The ruling demonstrates that proceedings under Section 73 must culminate in a valid order within the statutory or duly extended period, failing which the consequential notices and communications may become legally unsustainable.
This judgment is significant for GST practitioners because it reinforces limitation as a jurisdictional safeguard in tax adjudication. It also highlights that where the department accepts that no order was passed within the prescribed time, subsequent continuation of proceedings may be liable to be set aside.
The decision will be relevant to Advocates, Chartered Accountants, Company Secretaries, Tax Consultants, Corporate Tax Teams, Businesses and GST Practitioners dealing with delayed adjudication, special audits, Section 73 proceedings and notices issued after expiry of limitation.
