SC Upholds Quashing of GST Demand as Opportunity of Hearing Was Illusory

Avik Televentures Private Limited Vs Office Of The GST Officer (Supreme Court of India)

In Avik Televentures Private Limited Vs Office of the GST Officer, the Supreme Court dismissed the Special Leave Petitions filed against the Delhi High Court judgment and declined to interfere with the order quashing the adjudication proceedings passed under Section 73 of the CGST/DGST Act. The Supreme Court simply observed that no grounds existed for interference with the impugned judgment and dismissed the petitions along with pending applications.

The Delhi High Court had examined a challenge to an Order-in-Original dated 31.12.2025 passed pursuant to a Show Cause Notice issued under Section 73 of the CGST/DGST Act, by which liability of more than Rs. 26.72 crore comprising tax, interest, and penalty was confirmed against the petitioner. The petitioner, engaged in trading and export of branded mobile phones, contended that the adjudication proceedings violated principles of natural justice and were conducted in undue haste merely to meet the limitation period under Section 73(10) of the Act.

The petitioner submitted that a special audit had been initiated under Section 66 through appointment of a Special Auditor for FY 2021-22. After the audit report and observations were communicated, the petitioner filed detailed replies and supporting documents. Subsequently, a demand notice and later a Show Cause Notice were issued proposing substantial tax demand. The petitioner claimed that despite seeking adjournment of personal hearing and extension of time for filing documents, the respondent issued a “Reminder-1” on 27.12.2025 calling for additional documents by 29.12.2025 and fixing personal hearing on 30.12.2025. Since 28.12.2025 was a Sunday, the petitioner effectively had less than one working day to collect voluminous records and respond.

It was further argued that the adjudicating authority ignored requests for reasonable adjournment and passed the Order-in-Original on 31.12.2025 itself, immediately after conclusion of the hearing. According to the petitioner, discrepancies relied upon in the order related to suppliers or transporters and could have been clarified if adequate opportunity had been granted. The petitioner also alleged that parallel proceedings had been initiated for the same financial year through another Show Cause Notice dated 04.07.2025 and that contradictory findings had emerged because the petitioner had been discharged in proceedings arising from the earlier notice.

The respondent opposed the writ petition on the ground that the impugned order was appealable under Section 107 of the Act. It contended that the petitioner had already filed replies to the Show Cause Notice and had participated in hearings on 30.12.2025 and 31.12.2025. The respondent also argued that the notices dated 04.07.2025 and 24.09.2025 related to different transactions and separate grounds, including discrepancies discovered during special audit proceedings.

After examining the record, the Delhi High Court held that the opportunity granted to the petitioner was illusory and not a real or effective opportunity as contemplated under Sections 66(4) and 75(4) of the CGST/DGST Act. The Court observed that the petitioner had less than one effective working day to furnish extensive documents and respond to additional material sought by the department. It further held that mere participation in hearings could not amount to compliance with principles of natural justice when adequate time had not been granted.

The High Court also found merit in the allegation that the order had been passed with undue haste. Since the personal hearing concluded on 31.12.2025 and the Order-in-Original was passed on the same day confirming substantial liability, the Court observed that there was a legitimate apprehension that the material placed on record may not have been properly considered.

Rejecting the objection regarding alternate remedy, the High Court reiterated that writ jurisdiction can be exercised where principles of natural justice are violated. Accordingly, the Court quashed the Order-in-Original dated 31.12.2025 and remanded the matter to the adjudicating authority for fresh adjudication after granting proper opportunity of hearing and considering all submissions and documents. The Court clarified that it had not examined the merits of the tax dispute and left all rights and remedies open.

The Supreme Court thereafter upheld the High Court’s decision by refusing to interfere with the order.

Read HC Judgment in this case: Avik Televentures Private Limited Vs GST Officer (Delhi High Court)

FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER

1. Heard.

2. We find no grounds to interfere with the impugned judgment(s) and order(s) of the High Court. Hence, the present Special Leave Petitions are dismissed.

3. Pending application(s), if any, shall stand disposed of.