Personal hearing denied after SCN uploaded in invisible portal tab violates natural justice principles

Delhi HC set aside an order passed without providing petitioner personal hearing following SCN issued on 4th December 2023. The SCN was uploaded via 'Additional Notices Tab' which was not visible to petitioner at that time, though portal changes made it visible after 16th January 2024. Court found violation of natural justice principles as petitioner had no opportunity to respond to SCN. Following precedent in similar circumstances, HC remanded matter back to Adjudicating Authority for fresh consideration with proper hearing opportunity.

---

---

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this matter are:

(a) Whether the impugned Show Cause Notice (SCN) dated 4th December 2023 and the consequent adjudication order dated 15th April 2024 passed by the Sales Tax Officer were valid, particularly in light of procedural fairness and opportunity of hearing afforded to the Petitioner.

(b) The vires and validity of the impugned Notifications Nos. 9/2023-Central Tax dated 31st March 2023, 56/2023-Central Tax dated 28th December 2023, and 56/2023-State Tax dated 11th July 2024, which purportedly extended the time limits for adjudication under the GST Act.

(c) Whether the issuance of the impugned notifications complied with the procedural requirements under Section 168A of the Central Goods and Services Tax Act, 2017 (GST Act), including the necessity of prior recommendation by the GST Council.

(d) The implications of conflicting High Court decisions on the validity of these notifications and the ongoing Supreme Court proceedings concerning the same.

(e) Whether the Petitioner was denied a proper opportunity to file replies and participate in personal hearings, given that the SCN was uploaded under the 'Additional Notices Tab' on the GST portal and was not brought to the Petitioner's notice effectively.

(f) The appropriate relief and procedural directions in the light of the above issues pending final adjudication by the Supreme Court.

2. ISSUE-WISE DETAILED ANALYSIS

(a) Validity and Procedural Fairness of the Show Cause Notice and Adjudication Order

Legal Framework and Precedents: The principles of natural justice require that a party be given adequate notice and opportunity to be heard before an adverse order is passed. The GST procedural framework mandates issuance of SCNs and personal hearings before final adjudication. Previous judgments of this Court (e.g., Sughandha Enterprises through its Proprietor Devender Kumar Singh v. Commissioner of DGST) have emphasized the necessity of effective communication of notices and opportunity for personal hearing.

Court's Interpretation and Reasoning: The Court found that the SCN dated 4th December 2023 was uploaded only under the 'Additional Notices Tab' on the GST portal, which was not conspicuous or effectively brought to the Petitioner's attention. Consequently, the Petitioner did not receive proper notice or an opportunity to file replies or participate in personal hearings. The impugned order dated 15th April 2024 was passed ex-parte, without the Petitioner's reply or hearing.

Key Evidence and Findings: The Court noted the absence of a reply from the Petitioner and the lack of personal hearing. It also relied on earlier decisions of this Court, such as in Neelgiri Machinery, where similar circumstances led to remanding the matter for fresh adjudication with proper opportunity.

Application of Law to Facts: The Court applied the principles of natural justice and procedural fairness, holding that the Petitioner must be given a fair chance to respond to the SCN and be heard before passing any order.

Treatment of Competing Arguments: While the Department contended that the notices were uploaded on the portal, the Court emphasized that mere uploading under a less visible tab does not amount to effective service or notice.

Conclusion: The adjudication order was set aside, and the matter was remanded to the Adjudicating Authority to provide the Petitioner an opportunity to file replies and be heard through personal hearings, with proper communication of hearing notices.

(b) Validity of the Impugned Notifications under Section 168A of the GST Act

Legal Framework and Precedents: Section 168A of the GST Act empowers the government to extend the time limits for adjudication of show cause notices and passing of orders, but such extension requires prior recommendation of the GST Council. The impugned Notifications Nos. 9/2023 and 56/2023 (Central Tax) and 56/2023 (State Tax) purportedly extended deadlines for adjudication.

Court's Interpretation and Reasoning: The Court noted that the validity of these notifications was under active consideration in multiple High Courts and the Supreme Court. The Allahabad and Patna High Courts upheld the validity of Notifications 9 and 56 (Central Tax), while the Guwahati High Court quashed Notification 56 (Central Tax). The Telangana High Court raised doubts on Notification 56 (Central Tax), and this issue is now pending before the Supreme Court in SLP No. 4240/2025.

Key Evidence and Findings: The Court referred to the Supreme Court's order dated 21st February 2025, which acknowledged the cleavage of opinion among High Courts and issued notice in the matter. The Punjab and Haryana High Court refrained from expressing views on the vires of Section 168A or the notifications, deferring to the Supreme Court's decision.

Application of Law to Facts: Given the ongoing Supreme Court proceedings and divergent High Court rulings, this Court refrained from adjudicating the validity of the impugned notifications and left the issue open.

Treatment of Competing Arguments: The Petitioner challenged the notifications as invalid for procedural non-compliance and expiry of limitation periods, while the Department defended their validity based on the GST Council's recommendations and statutory provisions.

Conclusion: The Court held that the question of validity of the impugned notifications is sub judice before the Supreme Court and reserved its decision, subjecting any orders to the final outcome in the Supreme Court and related proceedings.

(c) Impact of Conflicting Judicial Opinions and Pending Supreme Court Proceedings

Legal Framework and Precedents: The doctrine of judicial discipline and the principle of stare decisis require lower courts to respect the rulings of higher courts and refrain from conflicting judgments on the same issue pending final adjudication.

Court's Interpretation and Reasoning: The Court acknowledged the conflicting decisions of various High Courts and the ongoing Supreme Court proceedings. It referred to the Punjab and Haryana High Court's order directing that all connected cases be governed by the Supreme Court's eventual ruling.

Key Evidence and Findings: The Court noted the Supreme Court's issuance of notice and interim orders, and the pendency of SLP No. 4240/2025, which directly concerns the validity of the impugned notifications.

Application of Law to Facts: The Court exercised judicial restraint by deferring to the Supreme Court's jurisdiction and refraining from deciding on the validity of the notifications.

Treatment of Competing Arguments: The Court balanced the need for procedural fairness to the Petitioner with the necessity to maintain judicial discipline and avoid contradictory rulings.

Conclusion: The Court disposed of the petitions with directions for further proceedings, subject to the outcome of the Supreme Court's decision, and left the question of validity of the notifications open.

(d) Appropriate Relief and Procedural Directions Pending Final Adjudication

Legal Framework and Precedents: Principles of natural justice and fair adjudication require that parties be given adequate opportunity to be heard. This Court's earlier decisions have emphasized remanding matters where notices were not effectively communicated.

Court's Interpretation and Reasoning: The Court categorized the petitions and determined that, pending final adjudication on the validity of notifications, the Petitioner should be afforded an opportunity to file replies to the SCN and participate in personal hearings.

Key Evidence and Findings: The Court relied on the fact that the SCN was not effectively communicated and that the Petitioner was denied a personal hearing. It noted improvements made to the GST portal after January 2024 but emphasized that the SCN in question pre-dated such changes.

Application of Law to Facts: The Court set aside the impugned demand orders and directed the Petitioner to file replies within thirty days, with hearing notices to be communicated both via email and mobile phone, not merely uploaded on the portal.

Treatment of Competing Arguments: While the Department sought to rely on the portal upload as sufficient notice, the Court prioritized effective communication and due process.

Conclusion: The matter was remanded to the Adjudicating Authority for fresh adjudication after providing the Petitioner a fair opportunity to be heard. All rights and remedies were kept open, and access to the GST portal was to be ensured.

3. SIGNIFICANT HOLDINGS

The Court made the following crucial legal determinations and established core principles:

"The impugned order dated 15th April, 2024 was passed without providing the Petitioner a personal hearing and in the absence of a reply on behalf of the Petitioner."

"Mere uploading of show cause notices on the GST portal under the 'Additional Notices Tab' without effective communication does not satisfy the requirement of notice and opportunity to be heard."

"In the absence of proper notice and opportunity, orders passed ex-parte are liable to be set aside and the matter remanded for fresh adjudication."

"The validity of the impugned notifications issued under Section 168A of the GST Act is presently under consideration before the Supreme Court and this Court refrains from expressing any opinion on the same."

"All orders passed by the Adjudicating Authority shall be subject to the outcome of the proceedings pending before the Supreme Court in S.L.P No 4240/2025 and this Court in W.P.(C) 9214/2024."

"The Petitioner shall be given an opportunity to file replies within a stipulated time and personal hearing notices shall be communicated by email and mobile phone, not merely by uploading on the portal."

"Access to the GST portal shall be provided to the Petitioner to enable filing of replies and access to notices and related documents."

"All rights and remedies of the parties are left open."

---