Ex-parte GST Demand Order Set Aside for Denial of Hearing

Case Title: Kiran Agarwal Proprietor Jai Shri Sanwariya Traders v. Govt. of NCT of Delhi & Ors.
Court: High Court of Delhi
Petition No.: W.P.(C) 5638/2024 & CM APPLs.23248/2024, 63743/2024
Date of Judgement: 23rd April, 2025 (Corrected & Released on 28th April, 2025)
Category of Dispute: Validity of Notifications & Ex-parte Assessment Order under GST
Relevant Sections: Section 73, Section 168A of the CGST/DGST Act, 2017

Facts of the Case (Para 2, 3, 6, 7)

• The petitioner challenged SCNs and subsequent orders issued under Section 73 of the CGST/DGST Act for FY 2018–19 and 2019–20.

• The petitioner also assailed CBIC Notifications No. 9/2023-CT (31.03.2023) and 56/2023-CT (28.12.2023) extending limitation for adjudication, alleging lack of due GST Council recommendation.

• The SCN dated 25.09.2023 was replied to on 11.10.2023, but the order dated 24.12.2023 confirmed a demand of ₹2,98,74,272/- without considering the reply.

• The order was passed in a cryptic, template form, without granting a personal hearing.

Question(s) in Consideration (Para 4, 5, 6, 9)

1. Whether Notifications 9/2023 and 56/2023 issued under Section 168A were valid, given conflicting HC rulings and pending SLP No. 4240/2025 before the Supreme Court.

2. Whether the impugned ex-parte demand order, passed without considering the reply or granting a hearing, was sustainable in law.

Observations of the Court (Para 7, 8, 9, 10, 11)

• The impugned order ignored the petitioner’s reply and was merely in template format, not reflecting application of mind.

• The absence of a hearing and cryptic reasoning rendered the order unsustainable.

• Since the Supreme Court is seized of the validity of Notifications 9/2023 & 56/2023, the Court refrained from adjudicating on vires of the notifications.

• Any fresh order passed would remain subject to the Supreme Court’s final verdict.

Judgement of the Court (Para 8, 9, 10, 11, 12)

• The Delhi High Court set aside the impugned ex-parte demand order dated 24.12.2023.

• Directed issuance of fresh personal hearing notice to petitioner at provided email & phone number.

• The adjudicating authority must pass a reasoned order in accordance with law after hearing.

• Validity of Notifications 9/2023 & 56/2023 left open, subject to outcome of SLP 4240/2025 before the Supreme Court.

Between Fine Lines

1. Ex-parte GST demand orders without considering replies or hearings are unsustainable.

2. Template/cut-paste orders violate principles of natural justice.

3. Notifications extending limitation under Section 168A face conflicting HC rulings; final word rests with SC.

4. Fresh adjudication directed with proper hearing ensured.

5. Any outcome remains subject to the Supreme Court’s ruling on the vires of impugned notifications.

Summary of Referred Cases

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