SCN Made Available on GST Portal After Section 73(2) Deadline Is Time-Barred; Internal Upload and Technical Glitch No Excuse: Delhi High Court

1. Title of the Case

2. Summary of the Judgment

Facts of the Case: The Petitioner, a Hyundai car dealer registered since 2017, faced scrutiny of its returns for FY 2019-20. The Department alleged ineligible ITC of Rs. 10,57,392 availed from suppliers whose registrations were cancelled retrospectively, ITC of Rs. 5,57,720 from suppliers who had not filed GSTR-3B, a late fee of Rs. 1,03,100 for delayed GSTR-1 and unpaid interest of Rs. 3,39,603 (Para 3). After an ASMT-10 dated 29.02.2024 and hearings fixed on 12.07.2024, 22.07.2024 and 31.07.2024, a show cause notice and an Order-in-Original dated 23.08.2024 followed (Para 4). The Department claimed that the SCN was generated on its internal AIO system in late May 2024 but, owing to a migration glitch, was re-uploaded on the BO portal only on 08.08.2024 (Paras 6, 17 and 19).

Issues for Determination: Whether an SCN for FY 2019-20, which under Section 73(2) read with Notification No. 56/2023-CT had to be issued by 31.05.2024, is time-barred when made available to the taxpayer only on 08.08.2024; and whether the ASMT-10 and personal hearings could cure the delay (Paras 5 to 8, 14 and 21).

Findings and Observations of the Court: The Court held that the three-month gap in Section 73(2) is a mandatory minimum limitation and not a directory timeline (Para 13). With the order deadline extended to 31.08.2024, the SCN had to be issued by 31.05.2024 (Para 14). The portal’s DRC list showed the notice as ‘awaiting GSTN confirmation’ without a Common Reference Number; a notice lying on an internal system is not issued in law, because issuance under Section 73(2) must be read with service under Section 169 (Paras 17 and 18). Re-issuance on 08.08.2024 was an admission that the earlier notice never became effective, and only a notification under Section 168A can extend time (Para 19). The Department also made no attempt at service by post or e-mail and cannot shelter behind its own glitch (Para 20). ASMT-10 and hearings are preliminary steps, not substitutes for the SCN, and the taxpayer’s non-response does not waive limitation (Paras 21 and 22).

Verdict and Basis of the Judgment: The writ petition was allowed. The SCN was held barred by limitation and the consequential Order-in-Original dated 23.08.2024 was set aside and quashed (Paras 24 to 26). Limitation goes to jurisdiction, and a breach cannot be cured by later participation or by equitable considerations (Para 23).

Analysis of the Judgment: The ruling ties issuance of an SCN to its communication, so the operative date is when the notice reaches the taxpayer through a Section 169 mode, not its internal date. It places the risk of portal failures on the Department and confirms that only Section 168A can enlarge statutory time.

Legal Takeaway: Taxpayers facing Section 73 demands should verify when the SCN actually appeared on the portal or was otherwise served, not merely the date printed on it. Where that date falls beyond the Section 73(2) deadline, the notice and every consequential order are open to challenge as being without jurisdiction.

3. Tabular Summary

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