High Court Quashes GST Demand Over Denial of Adjournment Request

That petition has been shifted to challenge the order of August 20, 2024, passed by the Sales Tax Officer Class II/AVATO, Delhi, for the Financial Year 2019-20, through which a demand of Rs. 2,25,81,108 was issued. The case also challenged the Show Cause Notice of 29th May 2024 and notifications No. 9/2023-Central Tax of 31st March 2023, No.56/2023-Central Tax of 28th December 2023 and No. 6/2023-State Tax of 11th July 2024.

The case was taken up along with connected matters involving identical issues concerning extension of time through the notifications, where divergent views of High Courts had been recorded, and the matter was pending consideration before the Supreme Court. It was submitted before the Court that Form GST ASMT-10 had been issued earlier for the same financial year and certain proceedings had already been concluded, but the adjudicating authority, while passing the impugned order, did not take this fact into account. The petitioners argued that the impugned order was passed without granting sufficient opportunity to file a reply to the Show Cause Notice and without hearing, leading to a violation of principles of natural justice.

Issue Raised: Whether the demand of Rs. 2,25,81,108/- for FY 2019-20 was sustainable when the reply to the Show Cause Notice was not filed, the request for adjournment was denied, and earlier proceedings under Form GST ASMT-10 were not considered.

HC’s Judgment: The Court noted that the challenged order of the 20th August 2024 was made without providing adequate opportunity to file a reply to the SCN of the 29th May 2024 and without passing an adjournment for hearing as requested. It was noted that the fact of issuance of Form GST ASMT-10 has not been noticed by the adjudicating authority. It was these facts that, in the eyes of the Court, supported the ordering of the case to be set aside. The Court thus quashed the challenged order and sent the case back to the adjudicating authority for de novo consideration.

The petitioner was given liberty to file a reply to the Show Cause Notice by 31st October 2025. It was further directed that the adjudicating authority shall issue notice of hearing on the GST portal and also through email and mobile, provide access to the portal, and thereafter pass a detailed and reasoned order in accordance with law after giving an opportunity of hearing. It was clarified that the adjudication would remain subject to the outcome of SLP pending before the Supreme Court and to related proceedings before this Court. All rights and remedies of the parties were left open.

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