Ex-Parte GST Order Set Aside for Violation of Natural Justice

Case Title: Abdul Gaffar Prop. M/s Farhad Traders v. Union of India & Anr.
Court Name: High Court of Delhi
Petition Number: W.P.(C) 16494/2024
Date of Judgment: 07 May 2025 (corrected and released on 13 May 2025)
Relevant Section: Section 75(4), 73(7), and 73(9) of CGST Act; Article 226 of the Constitution
Category of Dispute: Natural Justice Violation in Adjudication under GST

Facts of the Case [Para 2, 6, 7]

• The petitioner challenged the Show Cause Notice (SCN) dated 27.09.2023 and adjudication order dated 28.12.2023 under Section 73 of the CGST Act for FY 2017-18.

• The petitioner filed a detailed reply to the SCN on 07.11.2023 but alleged that no opportunity for personal hearing was granted before passing the impugned order [Para 6].

• The order claimed that hearing opportunity was granted, but it concluded ex-parte stating the reply was not supported by documents and calculations [Para 7].

Question(s) in Consideration [Para 3–5, 11]

1. Whether the order dated 28.12.2023 passed without granting a proper opportunity of hearing violated Section 75(4) of CGST Act and principles of natural justice.

2. Whether the validity of Notification No. 9/2023-Central Tax dated 31.03.2023 is relevant to the adjudication, pending before the Supreme Court in SLP No. 4240/2025 [Para 5, 11].

Observations of the Court [Para 7–10]

• The Court observed that although the order mentioned a hearing opportunity was given, the reply of the petitioner was not considered on merits [Para 8].

• The SCN and the order were passed without a real hearing or analysis of the reply, thus violating Section 75(4) of the CGST Act and principles of natural justice [Para 8–9].

• The Court also acknowledged that the vires of the notifications like 9/2023 and 56/2023 are under challenge before the Supreme Court in a batch of petitions, including SLP No. 4240/2025 [Para 4–5].

Judgement of the Court [Para 9–13]

• The adjudication order dated 28.12.2023 was set aside [Para 9].

• The Adjudicating Authority was directed to consider the reply dated 07.11.2023 afresh and issue a notice for personal hearing on the petitioner’s email and mobile number provided [Para 9].

• The adjudicating authority must pass a fresh order after hearing the petitioner [Para 10].

• The Court clarified that the issue of validity of Notification No. 9/2023 is left open and subject to the outcome of SLP No. 4240/2025 [Para 11].

• GST portal access must be provided to the petitioner [Para 12].

Between Fine Lines:

• Adjudication orders must not be passed mechanically without considering replies on record.

• Opportunity for personal hearing is a statutory right under Section 75(4) of the CGST Act.

• Procedural lapse, even if reply is filed, can lead to the setting aside of the order.

• Validity of GST-related notifications under Section 168A is sub judice before the Supreme Court.

• Courts are inclined to remand matters where ex-parte orders are passed without proper hearing.

Summary of Referred Cases:

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