Mahadev Industries Vs Union of India (Delhi High Court)
The Delhi High Court recently addressed a petition filed by Mahadev Industries challenging a show cause notice (SCN) and a subsequent order issued by the Department of Trade & Taxes. The case, heard in hybrid mode, also brought into question the validity of Notification No. 56/2023-Central Tax issued by the Central Board of Indirect Taxes and Customs. This petition is part of a larger batch of similar cases, with DJST Traders Private Limited v. Union of India & Ors. serving as the lead matter.
Key Issues and Challenges
The core of the challenge revolved around two main points:
- Validity of Notification No. 56/2023-Central Tax: Petitioners argued that this notification, which extended deadlines, was issued without the essential prior recommendation of the GST Council, as mandated by Section 168A of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017). They contended that any ratification occurred subsequent to the notification’s issuance, and that the notification incorrectly stated it was based on the GST Council’s recommendation. Similar challenges were also raised against Notification No. 09/2023-Central Tax and Notification No. 56/2023 (State Tax).
- Lack of Proper Notice and Hearing for Mahadev Industries: Mahadev Industries claimed that the SCN dated December 1, 2023, was uploaded on an ‘Additional Notices Tab’ on the GST portal, which meant it did not come to their knowledge. Consequently, the impugned order dated April 27, 2024, was passed without providing a personal hearing or an opportunity to file a reply.
Judicial Precedents and Divergent High Court Rulings
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