Invalid GST Order Passed Without Considering Reply – Remanded Back for Hearing

Case Title: Kiran Agarwal Proprietor Jai Shri Sanwariya Traders v. Govt of NCT of Delhi
Court: High Court of Delhi
Petition No.: W.P.(C) 5638/2024 & CM APPLs.23248/2024, 63743/2024
Date of Judgment: 23rd April, 2025
Category of Dispute: Show Cause Notice & Natural Justice under GST
Relevant Section: Section 73 of the CGST/DGST Act, 2017; Section 168A (extension of limitation)
Relevant Rules: CGST Rules on adjudication and service of notices

Facts of the Case

1. The petitioner challenged show cause notices and subsequent orders passed under Section 73 of the CGST/DGST Act, 2017 for FY 2018-19 and 2019-20 (Para 2).

2. The petitioner also challenged Notification Nos. 9/2023 and 56/2023 – Central Tax, arguing they were issued contrary to Section 168A without proper GST Council recommendation (Para 3–4).

3. The petitioner had filed a reply to the SCN dated 25.09.2023 on 11.10.2023, but the Adjudicating Authority passed the order on 24.12.2023, confirming demand of ₹2.98 crores without considering the reply (Para 6–7).

4. The impugned order was cryptic, in template form, and did not record reasons or discussion of petitioner’s submissions (Para 7).

Questions in Consideration

1. Whether the impugned order under Section 73 was valid when passed without considering reply or personal hearing? (Para 6–7)

2. Whether the challenge to Notification Nos. 9/2023 and 56/2023 issued under Section 168A should be adjudicated at this stage, or left to Supreme Court where the matter is pending? (Para 4–5).

Observations of the Court

1. The validity of the impugned notifications is already pending before the Supreme Court in SLP 4240/2025 (M/s HCC-SEW-MEIL-AAG JV v. ACST); therefore, this petition on that issue shall abide by the Supreme Court’s outcome (Para 5).

2. On facts, the order was cryptic, template-based, and ignored the reply filed by the petitioner, thereby violating principles of natural justice (Para 6–7).

3. Huge demands and penalties were raised ex parte, which required reconsideration by affording opportunity of hearing (Para 9–10).

Judgment of the Court

1. The impugned order dated 24.12.2023 confirming demand of ₹2.98 crores was set aside (Para 9).

2. The matter was remanded back with a direction to issue personal hearing notice to the petitioner on email and phone provided (Para 9).

3. The Adjudicating Authority shall pass a fresh order after hearing the petitioner (Para 10).

4. The issue of validity of Notifications 9/2023 & 56/2023 was left open, subject to the decision of the Supreme Court (Para 11).

Between Fine Lines (Simple Summary)

• The GST Department passed a demand order of nearly ₹3 crores without considering the dealer’s reply.

• The order was found to be cryptic and in a standard template format.

• The Delhi High Court quashed the order and directed fresh adjudication with proper hearing.

• The challenge to GST limitation extension notifications will be decided by the Supreme Court.

• Taxpayers must be given a fair chance before demands are confirmed.

Summary of Referred Cases

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