GST show-cause notice and delayed adjudication extensions challenged; order set aside for fresh hearing after non-response to SCN.

Where an assessee challenged a GST SCN and adjudication order on the ground that the time-limit for adjudication was impermissibly extended by impugned notifications, the HC noted that the vires of those notifications is pending consideration before the SC and, consistent with its approach in connected matters, refrained from deciding their validity at this stage. Since the assessee neither filed a reply to the SCN/reminder nor attended the scheduled personal hearing, and the adjudication proceeded without a proper opportunity to address the merits, the HC held that natural justice warranted a fresh consideration. The impugned order was set aside and the matter remanded to the adjudicating authority for de novo adjudication.

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ISSUES PRESENTED AND CONSIDERED

1) Whether the adjudication order confirming tax, interest and penalty, passed after issuance of a show cause notice, was liable to be set aside for want of an effective opportunity to file a reply and to be heard, resulting in an ex parte determination.

2) What consequential directions were warranted upon remand, including timelines for filing reply, grant of personal hearing, communication mode, portal access, and imposition of costs.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Sustainability of an ex parte adjudication order where no reply/personal hearing participation occurred

Legal framework: The Court applied the principle of natural justice as reflected in its reasoning that adjudication confirming demand should not be sustained where the taxpayer did not get a proper opportunity to present its case on merits.

Interpretation and reasoning: The Court noted that the show cause notice was followed by a reminder and a scheduled personal hearing, yet no reply was filed and the hearing was not attended. The Court accepted the explanation that the proceedings were missed due to organisational changes (demerger) and found that, in the circumstances, the assessee did not get a proper opportunity to be heard. Relying on its approach in a similar situation, the Court held that an opportunity ought to be afforded to contest the matter on merits rather than sustaining the ex parte order.

Conclusions: The impugned adjudication order was set aside and the matter was remanded to the adjudicating authority for fresh decision after receiving the reply and granting a personal hearing.

Issue 2: Manner of remand and ancillary directions (costs, timelines, hearing, portal access, and effect of pending challenges)

Legal framework: The Court exercised its writ jurisdiction to mould relief by prescribing procedural safeguards on remand, including costs, fixed timelines, and ensuring meaningful participation through portal access and communication of hearing notice.

Interpretation and reasoning: Considering that the assessee had not participated earlier, the Court balanced remand relief by imposing costs payable to a designated costs account, while ensuring the remand is effective through (i) a firm deadline to file the reply to the show cause notice, (ii) a mandatory personal hearing thereafter, (iii) specific modes of communicating the hearing notice (email and mobile), and (iv) direction to provide GST portal access within one week to enable uploading of the reply and viewing notices/documents. The Court expressly declined to decide the validity of the impugned notifications extending limitation and kept that issue open, directing that any fresh order would remain subject to the outcome of pending proceedings before the Supreme Court and the pending batch concerning parallel State notifications.

Conclusions: Remand was ordered with: (a) setting aside of the impugned order subject to payment of costs; (b) time granted up to a specified date to file reply; (c) adjudicating authority to issue personal hearing notice and then pass a fresh reasoned order considering reply and submissions; (d) GST portal access to be provided within one week; and (e) the validity of the impugned notifications left open, with the fresh order to abide by the outcome of pending higher-court consideration.

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