High Court Sets Aside GST Adjudication Order Passed Without Hearing; Matter Remanded for Fresh Adjudication

The petitioner filed the current writ petition pursuant to Articles 226 and 227 of the Indian Constitution, objecting to the order dated 18th August 2024 made by the Sales Tax Officer (Class II/Avato Ward 62, Zone-5) for the Financial Year 2019–20 and the underlying show cause notice dated 8th May 2024. In addition to these, the petitioner also challenged the constitutional validity of Notification No. 9/2023 (Central Tax dated 31-03-2023), Notification No. 56/2023 (Central Tax dated 28-12-2023), and their respective State Notifications No. 9/2023 dated 22-06-2023 and No. 56/2023 dated 11-07-2024, all issued allegedly under Section 168A of the CGST Act.

The issue concerning the validity of these notifications had already been raised in a batch of petitions before various High Courts, and divergent views were expressed, some High Courts upholding and others striking them down. The Delhi High Court recorded that the question of vires of these notifications is now sub judice before the Hon’ble Supreme Court in SLP No. 4240/2025 (M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.). Therefore, while the broader challenge to the notifications was kept open, the Court proceeded to examine the procedural fairness of the petitioner’s individual case.

Main Issue: Whether an order of adjudication issued without giving a chance to submit a reply or access a personal hearing is against the principles of natural justice, hence deserving interference and remand for re-adjudication.

HC’s Ruling: 

The High Court observed that the validity of the impugned notifications under Section 168A was already under consideration before the Supreme Court, and therefore, it would not adjudicate that issue at this stage. But as the order had been passed by the adjudicating authority without affording the opportunity to the petitioner either to reply or to appear for a hearing, the Court held that the order was affected by procedural infirmity. Citing its previous ruling in the case of Sugandha Enterprises, the Bench reasserted that in cases where the taxpayer is not provided with a reasonable opportunity to put forth their case, the proceedings are tainted. Based on this rationale, the challenged order of 18th August 2024 was reversed, sending back the case to the original authority for de novo adjudication.

The Court allowed the petitioner liberty until 30th November 2025 to submit a detailed response to the show cause notice issued on 8th May 2024. The adjudicating authority was ordered to issue a notice for a personal hearing as soon as the reply is received and see that the same is intimated through the petitioner’s registered mobile no. (9811081159) and email ID ([email protected]). The authority will then take into consideration the response and submissions heard during the hearing and pass a well-reasoned order according to law. It was also made clear that the adjudication on remand would still be subject to the final result of SLP No. 4240/2025 in the Supreme Court and the ongoing proceedings of W.P.(C) 9214/2024, Engineers India Limited v. Union of India & Ors., in the Delhi High Court. In these directions, the writ petition and pending applications were all disposed of.

To Read Full Judgment, Download PDF Given Below