SCN Served via Additional Tab Without Intimation Quashes Demand Order

Case Title: M/s Jain Steel and Traders vs. Union of India & Anr.
Court: Delhi High Court
Petition Number: W.P.(C) 6557/2025
Category: Principles of Natural Justice / Validity of SCN / Procedural Fairness
Date of Judgment: 16 May 2025
Relevant Sections: Article 226 of Constitution of India; Section 73 and Section 168A of the CGST Act, 2017

Facts of the Case

[Para 2, 6]
The Petitioner, M/s Jain Steel and Traders, challenged a Show Cause Notice (SCN) dated 5.12.2023 and a consequent demand order dated 27.04.2024. The SCN was uploaded under the “Additional Notices” tab of the GST portal, which the Petitioner claimed they were unaware of. As a result, the Petitioner could not respond or appear for a personal hearing.

[Para 3, 4]
The Petitioner also challenged Notification No. 56/2023–Central Tax dated 28.12.2023 issued under Section 168A of the CGST Act, 2017, contending that it lacked proper GST Council recommendation before issuance.

Questions in Consideration

[Para 6, 9, 12]

1. Whether the demand order passed without serving the SCN properly and without personal hearing is valid?
2. Whether Notification No. 56/2023–Central Tax is constitutionally valid under Section 168A of the CGST Act, 2017?

Observations of the Court

[Para 5–7]

• The Court acknowledged ongoing litigation regarding the validity of Notification No. 56/2023 before the Hon’ble Supreme Court in SLP 4240/2025 (M/s HCC-SEW-MEIL-AAG JV).
• Several High Courts have expressed diverging views on the notification’s validity, including Telangana (critical), Patna (upholding), and Guwahati (quashing).

[Para 6–7]

• The Court accepted the Petitioner’s claim that the SCN was not visible under usual notices and that post-16 Jan 2024, changes have been made to the portal to correct this.

[Para 7]

• Referred to similar remand orders passed in Neelgiri Machinery, Satish Chand Mittal, and Anant Wire Industries, where SCNs uploaded under the Additional Notices tab were deemed inadequate for service.

Judgment of the Court

[Para 8–13]

• The impugned demand order dated 27.04.2024 is set aside.
• Petitioner is directed to file a reply to the SCN by 10 July 2025.
• The Adjudicating Authority shall issue a fresh personal hearing notice via email and phone and pass a speaking order after hearing the Petitioner.
• The judgment is without prejudice to the outcome of the pending SLP before the Supreme Court concerning Notification No. 56/2023.

Between Fine Lines

• GST Notices served only through “Additional Notices” tab without proper intimation are not valid.
• Taxpayers must be given adequate notice and opportunity to respond.
• Delhi High Court affirmed procedural fairness over technical service.
• Demand orders passed ex parte due to unnoticed SCNs stand quashed.
• Validity of Notification No. 56/2023 remains subject to Supreme Court’s verdict.

Summary of Referred Cases

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