Case Law Details
World Art Press Vs Commissioner Delhi Goods And Service Tax And Others (Delhi High Court)
Delhi High Court, in the case of World Art Press Through Its Proprietor Vs Commissioner Delhi Goods And Service Tax And Others, has set aside a Show Cause Notice (SCN) and a subsequent Demand Order, citing concerns over the petitioner’s inability to access the SCN on the GST portal. The court’s decision, delivered during a hybrid hearing, allows the petitioner a fresh opportunity to respond and be heard.
The petitioner, World Art Press, through its proprietor Ms. Rashi Bansal, had filed a petition under Article 226 of the Constitution of India challenging an SCN dated September 25, 2023, and a Demand Order dated December 26, 2023. Additionally, the petition also contested Notification No. 9/2023-Central Tax dated March 31, 2023, issued by the Central Board of Indirect Taxes and Customs.
Challenge to Notification Validity
A significant aspect of the case, and a batch of similar matters, revolved around the validity of Notification No. 9/2023-Central Tax and Notification No. 56/2023 (Central Tax). These notifications relate to the extension of deadlines under the Central Goods and Services Tax Act, 2017. The core of the challenge to these notifications, as heard in the lead matter W.P.(C) 16499/2023 titled ‘DJST Traders Pvt. Ltd. vs. Union of India and Ors.’, was based on the contention that the proper procedure, specifically the prior recommendation of the GST Council as mandated by Section 168A, was not consistently followed.
In the case of Notification No. 9, the recommendation was made prior to its issuance. However, for Notification No. 56/2023 (Central Tax), the challenge was that the extension was granted contrary to Section 168A, with ratification occurring after the notification’s issuance. The notification itself incorrectly stated that it was based on the GST Council’s recommendation. Similarly, Notification No. 56 of 2023 (State Tax) was challenged for being issued on July 11, 2024, after the expiry of the limitation period specified in Notification No. 13 of 2022 (State Tax).
Cleavage of Opinions Among High Courts
The court noted that various High Courts across the country have taken differing stances on the validity of these notifications:
- The Allahabad High Court has upheld the validity of Notification No. 9.
- The Patna High Court has upheld the validity of Notification No. 56.
- Conversely, the Guwahati High Court has quashed Notification No. 56 of 2023 (Central Tax).
- The Telangana High Court, without delving into the vires of the notifications, made observations indicating the invalidity of Notification No. 56 of 2023 (Central Tax). This specific judgment is currently under consideration by the Supreme Court in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.
Supreme Court’s Intervention and Punjab & Haryana High Court’s Approach
The Supreme Court, in its order dated February 21, 2025, in the aforementioned SLP, highlighted that the central issue for consideration is whether the time limit for adjudication of show cause notices and passing orders under Section 73 of the GST Act for the financial year 2019-2020 could have been extended through the impugned notifications under Section 168-A. The Supreme Court also acknowledged the “cleavage of opinion amongst different High Courts.”
Following this, the Punjab and Haryana High Court, in its order dated March 12, 2025, in a batch of writ petitions, chose to exercise judicial discipline. It refrained from expressing an opinion on the vires of Section 168-A and the challenged notifications, directing that all connected cases would be governed by the Supreme Court’s final adjudication in SLP No. 4240/2025. The interim orders passed in those cases were to continue until the Supreme Court’s decision.
Procedural Lapses and Remand by Delhi High Court
While the larger issue of notification validity awaits the Supreme Court’s decision, the Delhi High Court addressed the specific factual circumstances of World Art Press. The petitioner contended that the SCN dated September 25, 2023, was uploaded solely on the “Additional Notices Tab” of the GST portal, preventing them from becoming aware of it. Consequently, the impugned order dated December 26, 2023, was passed without a personal hearing or a reply from the petitioner. The respondent, Commissioner Delhi Goods and Service Tax, stated that two reminder notices were also issued on November 9, 2023, and December 5, 2023.
The High Court referred to its own precedent in W.P.(C) 13727/2024 titled ‘Neelgiri Machinery through its Proprietor Mr. Anil Kumar V. Commissioner Delhi Goods And Service Tax And Others’. In that case, under similar circumstances where the SCN was uploaded via the ‘Additional Notices Tab’, the matter was remanded. The court had previously observed in Satish Chand Mittal (Trade Name National Rubber Products) vs. Sales Tax Officer SGST, Ward 25-Zone 1 (W.P.(C) 12589/2024) and Anant Wire Industries vs. Sales Tax Officers Class II/Avato, Ward 83 & Anr (W.P.(C) 17867/2024) that the intention is to ensure a fair opportunity for petitioners to file replies and be heard on merits, rather than orders being passed by default. The court in those cases noted that the issue of SCN visibility under the ‘Additional Notices & Orders’ tab had been addressed by the Department post-January 16, 2024, by placing it under the general menu.
Following this precedent, the Delhi High Court set aside the impugned demand order against World Art Press. The court directed that the entire matter be considered afresh after providing a personal hearing notice to the petitioner via email. The petitioner has been granted time until July 10, 2025, to file a reply before the Adjudication Authority, which is mandated to hear the matter on merits and pass a comprehensive order.
The court reiterated that all rights and remedies of the parties remain open. It also ensured that access to the GST Portal, if not already available, would be provided to the petitioner for filing replies and accessing related documents. Crucially, the court explicitly stated that the issue regarding the validity of the impugned notification is left open, and the Adjudicating Authority’s order will be subject to the outcome of the Supreme Court’s decision in S.L.P No 4240/2025. The petition and any pending applications were disposed of in these terms.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner– World Art Press through Its Proprietor Ms Rashi Bansal, under Article 226 of the Constitution of India inter alia, challenging the impugned Show Cause Notice dated 25thSeptember, 2023 (hereinafter ‘impugned SCN’) and Demand Order dated 26th December, 2023 (hereinafter ‘impugned order’).
3. Additionally, the present petition also challenges the Notification No. 9/2023- Central Tax dated 31stMarch, 2023 issued by the Central Board of Indirect Taxes and Customs (hereinafter, ‘the impugned notification’).
4. The impugned notification was under consideration before this Court in a batch of matters with the lead matter being W.P.(C) 16499/2023 titled ‘DJST Traders Pvt. Ltd. vs. Union of India and Ors.’. On 22rd April, 2025, the parties were heard at length qua the validity of the impugned notifications and accordingly, the following order was passed:
“4. Submissions have been heard in part. The broad challenge to both sets of Notifications is on the ground that the proper procedure was not followed prior to the issuance of the same. In terms of Section 168A, prior recommendation of the GST Council is essential for extending deadlines. In respect of Notification no.9, the recommendation was made prior to the issuance of the same. However, insofar as Notification No. 56/2023 (Central Tax) the challenge is that the extension was granted contrary to the mandate under Section 168A of the Central Goods and Services Tax Act, 2017 and ratification was given subsequent to the issuance of the notification. The notification incorrectly states that it was on the recommendation of the GST Council. Insofar as the Notification No. 56 of 2023 (State Tax) is concerned, the challenge is to the effect that the same was issued on 11th July, 2024 after the expiry of the limitation in terms of the Notification No.13 of 2022 (State Tax).
5. In fact, Notification Nos. 09 and 56 of2023 (Central Tax) were challenged before various other High Courts. The Allahabad Court has upheld the validity of Notification no.9. The Patna High Court has upheld the validity of Notification no.56. Whereas, the Guwahati High Court has quashed Notification No. 56 of 2023 (Central Tax).
6. The Telangana High Court while not delving into the vires of the assailed notifications, made certain observations in respect of invalidity ofNotification No. 56 of 2023 (Central Tax). This judgment of the Telangana High Court is now presently under consideration by the Supreme Court in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. The Supreme Court vide order dated 21st February, 2025, passed the following order in the said case:
“1. The subject matter of challenge before the High Court was to the legality, validity and propriety of the Notification No.13/2022 dated 5-7-2022 & Notification Nos.9 and 56 of 2023 dated 31-3-2023 & 8-12-2023 respectively.
2. However, in the present petition, we are concerned with Notification Nos.9 & 56/2023 dated 31-3-2023 respectively.
3. These Notifications have been issued in the purported exercise of power under Section 168 (A) of the Central Goods and Services Tax Act. 2017 (for short, the “GST Act”).
4. We have heard Dr. S. Muralidhar, the learned Senior counsel appearing for the petitioner.
5. The issue that falls for the consideration of this Court is whether the time limit for adjudication of show cause notice and passing order under Section 73 of the GST Act and SGST Act (Telangana GST Act) for financial year 2019-2020 could have been extended by issuing the Notifications in question under Section 168-A of the GST Act.
6. There are many other issues also arising for consideration in this matter.
7. Muralidhar pointed out that there is a cleavage of opinion amongst different High Courts of the country. 8. Issue notice on the SLP as also on the prayer for interim relief, returnable on 7-3-2025.”
7. In the meantime, the challenges were also pending before the Bombay High Court and the Punjab and Haryana High Court. In the Punjab and Haryana High Court vide order dated 12th March, 2025, all the writ petitions have been disposed of in terms of the interim orders passed therein. The operative portion of the said order reads as under:
“65. Almost all the issues, which have been raised before us in these present connected cases and have been noticed hereinabove, are the subject matter of the Hon’ble Supreme Court in the aforesaid SLP.
66. Keeping in view the judicial discipline, we refrain from giving our opinion with respect to the vires of Section 168-A of the Act as well as the notifications issued in purported exercise of power under Section 168-A of the Act which have been challenged, and we direct that all these present connected cases shall be governed by the judgment passed by the Hon’ble Supreme Court and the decision thereto shall be binding on these cases too.
67. Since the matter is pending before the Hon’ble Supreme Court, the interim order passed in the present cases, would continue to operate and would be governed by the final adjudication by the Supreme Court on the issues in the aforesaid SLP-4240-2025.
68. In view of the aforesaid, all these connected cases are disposed of accordingly along with pending applications, if any.”
8. The Court has heard ld. Counsels for the parties for a substantial period today. A perusal of the above would show that various High Courts have taken a view and the matter is squarely now pending before the Supreme Court.
9. Apart from the challenge to the notifications itself, various counsels submit that even if the same are upheld, they would still pray for relief for the parties as the Petitioners have been unable to file replies due to several reasons and were unable to avail of personal hearings in most cases. In effect therefore in most cases the adjudication orders are passed ex-parte. Huge demands have been raised and even penalties have been imposed.
10. Broadly, there are six categories of cases which are pending before this Court. While the issue concerning the validity of the impugned notifications is presently under consideration before the Supreme Court, this Court is of the primafacie view that, depending upon the categories of petitions, orders can be passed affording an opportunity to the Petitioners to place their stand before the adjudicating authority. In some cases, proceedings including appellate remedies may be permitted to be pursued by the Petitioners, without delving into the question of the validity of the said notifications at this stage.
11. The said categories and proposed reliefs have been broadly put to the parties today. They may seek instructions and revert by tomorrow i.e., 23rd April, 2025.”
5. Thereafter, on 23rd April, 2025, this Court, having noted that the validity of the impugned notifications is under consideration before the Supreme Court, had disposed of several matters in the said batch of petitions after addressing other factual issues raised in the respective petitions. Additionally, while disposing of the said petitions, this Court clearly observed that the validity of the impugned notification therein shall be subject to the outcome of the proceedings before the Supreme Court.
6. On facts, however, the submission of the Petitioner is that the SCN dated 25th September, 2023, from which the impugned order arises, was uploaded on the ‘Additional Notices Tab’. Therefore, the same did not come to the knowledge of the Petitioner. The impugned order dated 26thDecember 2023, was passed without providing the Petitioner a personal hearing and in the absence of a reply on behalf of the Petitioner.
7. Responding to this, ld. Standing Counsel for the Respondent-Commissioner Delhi Goods and Service Tax submits that two reminder notices were also issued on 09thNovember, 2023 and 05th December, 2023 respectively.
8. The Court has perused the records. In fact, this Court in W.P.(C) 13727/2024 titled ‘Neelgiri Machinery through its Proprietor Mr. Anil Kumar V. Commissioner Delhi Goods And Service Tax And Others’, under similar circumstances where the SCN was uploaded vide ‘Additional Notices Tab’ had remanded the matter in the following terms:
“6. Be that as it may, intention is to ensure that the Petitioner is given an opportunity to file its reply and is heard on merits and that orders are not passed in default. Since there is no clarity on behalf of the Department, this Court follows the order dated 9th September, 2024 in Satish Chand Mittal (Trade Name National Rubber Products) vs. Sales Tax Officer SGST, Ward 25-Zone 1 (W.P.(C) 12589/2024; DHC) as also order dated 23rd December, 2024 in Anant Wire Industries vs. Sales Tax Officers Class II/Avato, Ward 83 & Anr (W.P.(C) 17867/2024; DHC) where the Court under similar circumstances has remanded back the matter to ensure the Noticee/Petitioners get a fair opportunity to be heard. The order of the Court in Sathish Chand Mittal (Supra) reads as under:
“4. It is the petitioner’s case that he had not received the impugned SCN and, therefore, he had no opportunity to respond to the same. For the same reason, the petitioner claims that he had not appear for a personal hearing before the Adjudicating Authority, which was scheduled on 17.10.2023 and later rescheduled to 30.11.2023 as per the Reminder.
5. The petitioner also states that the impugned SCN, the Reminder and the impugned order are unsigned.
6. Singhvi, the learned counsel appearing for the respondent, on advance notice, fairly states that the principal issue involved in the present case is squarely covered by the decisions of this Court in M/s ACE Cardiopathy Solutions Private Ltd. v. Union of India & Ors.: Neutral Citation No. 2024:DHC:4108-DB as well as in Kamla Vohra v. Sales Tax Officer Class II/ Avato Ward 52 : Neutral Citation
No.2024:DHC:5108- DB.
7. He states that possibly, the petitioner did not had the access of the Notices as they were projected on the GST Portal under the tab ‘Additional Notices & Orders’. He submits that the said issue has now been addressed and the ‘Additional Notices & Orders’ tab is placed under the general menu and adjacent to the tab ‘Notices & Orders’.
8. In view of the above, the present petition is allowed and the impugned order is set aside.
9. The respondent is granted another opportunity to reply to the impugned SCN within a period of two weeks from date. The Adjudicating Authority shall consider the same and pass such order, as it deems fit, after affording the petitioner an opportunity to be heard.
10. The present petition is disposed of in the aforesaid terms.
11. All pending applications are also disposed of.”
7. The impugned demand orders dated 23rdApril, 2024 and 5th December, 2023 are accordingly set aside. In response to show cause notices dated 04th December, 2023 and 23th September, 2023, the Petitioner shall file its replies within thirty days. The hearing notices shall now not be merely uploaded on the portal but shall also be e-mailed to the Petitioner and upon the hearing notice being received, the Petitioner would appear before the Department and make its submissions. The show cause notices shall be adjudicated in accordance with law.
8. The petitions are disposed of in the above terms. The pending application(s), if any, also stand disposed of.”
9. It is relevant to note that post 16thJanuary 2024, the Department has effected changes in the portal to ensure that the SCNs become visible to parties. However, the SCN in the present case is of 25th September, 2023. Therefore, following the above decision in P.(C) 13727/2024, the impugned order is set aside. Let the entire matter be considered afresh after giving a personal hearing notice to the Petitioner on the following email ID of the Petitioner.
Email – gambhirpk7@gmail.com
Phone Number – 9810220294
10. The Petitioner is permitted to file his reply before the concerned Adjudication Authority by 10thJuly, 2025. The concerned adjudicating Authority shall hear the matter on merits and pass a comprehensive order.
11. All the rights and remedies of the parties are left open. Access to the GST Portal, if not already available, shall be ensured to be provided to the Petitioner to enable filing reply as also access to the notices and related documents.
12. However, it is again made clear that the issue in respect of the validity of the impugned notification is left open and the order of the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in L.P No 4240/2025 titled ‘M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors’.
13. The petition is disposed of in the above terms. Pending applications, if any, are also disposed of.
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