Case Title: Power2SME Pvt. Ltd. v. Commissioner of Delhi GST Department of Trade and Taxes & Anr.
Court: High Court of Delhi
Petition No.: W.P.(C) 17167/2024 & CM APPL.72859/2024
Category of Dispute: Input Tax Credit (ITC) – Natural Justice – Section 73 Proceedings
Relevant Sections: Section 73, Section 16(2)(c), Section 168A of CGST Act, 2017
Date of Judgement: 23rd April, 2025
Facts of the Case
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The Petitioner challenged (i) the Order-in-Original dated 16.08.2024 passed under Section 73 CGST Act, and (ii) Notification No. 56/2023-Central Tax dated 28.12.2023. [Para 2–3]
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The SCN dated 31.05.2024 pertained to FY 2019–20. The Petitioner filed a reply on 01.07.2024 but sought adjournment for personal hearing, which was not granted. [Para 6–7]
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The Petitioner alleged that the order was passed without affording opportunity of hearing and contained grounds beyond the SCN. [Para 8]
Questions in Consideration
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Whether the impugned order was passed in violation of principles of natural justice by denying the petitioner an opportunity of personal hearing? [Para 7–10]
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Whether the validity of Notification No. 56/2023 can be adjudicated when the matter is already pending before the Supreme Court in SLP No. 4240/2025? [Para 5, 13]
Observations of the Court
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The Court noted that different High Courts have taken divergent views on Notification 56/2023, and the issue is sub judice before the Supreme Court. Hence, the challenge to the notification is left open. [Para 5, 13]
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The Court observed that the impugned order was passed without granting adequate opportunity to the Petitioner, particularly when personal hearing was crucial to contest issues raised in the SCN. [Para 9–10]
Judgement of the Court
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The impugned order dated 16.08.2024 was set aside. [Para 11]
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Petitioner was granted 30 days’ time to file a supplementary reply to the SCN. [Para 11]
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The Adjudicating Authority must issue a fresh personal hearing notice, duly communicated via the Petitioner’s mobile number and email. [Para 11]
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The adjudicating authority shall pass a fresh order on merits, subject to the outcome of the Supreme Court’s decision on Notification No. 56/2023. [Para 12–13]
Between Fine Lines (5-Line Summary in Simple Words)
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The Delhi HC set aside a GST order against Power2SME as no proper hearing was given.
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The company had replied to the SCN but could not attend the hearing.
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The authority passed an order without providing another chance for oral hearing.
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The Court said natural justice requires fresh opportunity to defend.
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Fresh adjudication will happen, but final outcome depends on SC’s ruling on the validity of Notification 56/2023.
Summary of Referred Cases
| Case Name | Citation | Summary | Verdict |
|---|---|---|---|
| DJST Traders Pvt. Ltd. v. Union of India & Ors. | W.P.(C) 16499/2023 (Delhi HC batch matter) | Lead matter challenging Notification 56/2023. | Pending; tagged with batch matters. |
| M/s HCC-SEW-MEIL-AAG JV v. ACST | SLP No. 4240/2025 (SC) | Challenge to extension of limitation under Section 168A via Notifications 9 & 56/2023. | Pending before SC. |
| Allahabad HC ruling | (On Notification 9/2023) | Upheld validity of Notification 9/2023. | Notification valid. |
| Patna HC ruling | (On Notification 56/2023) | Upheld validity of Notification 56/2023. | Notification valid. |
| Guwahati HC ruling | (On Notification 56/2023) | Quashed Notification 56/2023. | Notification invalid. |
| Telangana HC ruling | (On Notification 56/2023) | Did not decide vires, but raised doubts. | Issue referred; under SC scrutiny. |
| Punjab & Haryana HC batch petitions | Order dated 12.03.2025 | Refrained from deciding; held matters will abide by SC outcome. | Petitions disposed subject to SC decision. |
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