National Enterprises Vs Union of India & Ors. (Delhi High Court)
In a significant ruling, the Delhi High Court has quashed show cause notices and concurrent demand orders issued under Section 73 of the Delhi/Central Goods and Services Tax Act, 2017, against National Enterprises. The court emphasized that even after a GST registration is cancelled, taxpayers must be afforded an opportunity for hearing and proper service of notices, which was lacking in this case.
The petitions, filed by National Enterprises, challenged show cause notices from December 2023 and May 2024, and subsequent orders from April 2024 and August 2024, pertaining to financial years 2018-19 and 2019-20. Additionally, the petitions contested the validity of Central Tax Notification Nos. 9/2023 and 56/2023, issued by the Central Board of Indirect Taxes and Customs (CBIC), which extended deadlines for tax adjudication.
The challenge to these notifications forms part of a larger batch of petitions, with DJST Traders Private Limited v. Union of India & Ors. (W.P.(C) No. 16499/2023) serving as the lead matter. The broad contention against these notifications is that the proper procedure, specifically the prior recommendation of the GST Council as mandated by Section 168A of the CGST Act, 2017, was not consistently followed. While Notification No. 9/2023 had a prior recommendation, Notification No. 56/2023 faced allegations of post-facto ratification, inaccurately stating it was based on the GST Council’s recommendation. Similar state-level notifications also faced challenges regarding their issuance after the expiry of limitation periods.
