A.S. Builders Vs Union Of India & Anr. (Delhi High Court)
Delhi High Court has dismissed a writ petition filed by M/s A.S. Builders, challenging a Goods and Services Tax (GST) demand order. The court’s decision, issued in the case of A.S. Builders Vs Union Of India & Anr., primarily rested on the petitioner’s failure to avail of a personal hearing opportunity offered by the tax authorities.
The petition, heard through a hybrid mode, contested a Show Cause Notice dated May 29, 2023, and a subsequent demand order issued on August 31, 2024, by the Office of Sales Tax Officer Class II/AVATO, Ward 77, Zone 7, Delhi. In addition, A.S. Builders also challenged the legality of Notification No. 56/2023-Central Tax dated December 28, 2023.
The High Court noted that the validity of Notification No. 56/2023-Central Tax was already under examination in a batch of petitions, with the lead case being DJST Traders Pvt. Ltd. vs. Union of India and Ors. On April 22, 2025, during the hearing of this batch, the court delved into the broad challenge against various notifications, including Notification No. 9 and 56 of 2023 (Central Tax), on the grounds of procedural irregularities, particularly concerning the mandatory prior recommendation of the GST Council under Section 168A of the Central Goods and Services Tax Act, 2017.
Judicial Precedents and Conflicting Views: The court highlighted a divergence of opinions among various High Courts regarding the validity of these notifications. The Allahabad High Court had upheld Notification No. 9, while the Patna High Court had affirmed Notification No. 56. Conversely, the Guwahati High Court had quashed Notification No. 56 of 2023 (Central Tax).
A significant development noted by the Delhi High Court was the Telangana High Court’s observations concerning the invalidity of Notification No. 56 of 2023 (Central Tax), without explicitly delving into its vires. This specific judgment is currently under scrutiny by the Supreme Court of India 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, in its order dated February 21, 2025, in the aforementioned SLP, recognized the conflicting High Court rulings and framed the key issue for consideration: “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.” The Supreme Court issued notice on the SLP and the prayer for interim relief, setting the returnable date as March 7, 2025.
Further, the Delhi High Court observed that the Bombay High Court and the Punjab and Haryana High Court were also seized of similar challenges. The Punjab and Haryana High Court, in its order dated March 12, 2025, disposed of all connected writ petitions, directing that they would be governed by the Supreme Court’s decision in the pending SLP. The interim orders in those cases were to continue until the final adjudication by the Supreme Court.
Petitioner’s Missed Opportunity: Despite the ongoing legal complexities surrounding the validity of the impugned notifications, the Delhi High Court proceeded to address the specific factual matrix of A.S. Builders’ petition. The court noted that A.S. Builders had filed a reply to the Show Cause Notice on June 29, 2024. Crucially, the impugned order indicated that an option for personal appearance had been extended to the petitioner, but A.S. Builders failed to avail this opportunity.
Given the petitioner’s non-appearance for the personal hearing, the Delhi High Court opted not to delve into the merits of the demand order at this stage. Instead, the court permitted A.S. Builders to file an appeal against the demand order by July 10, 2025, along with the requisite pre-deposit.
The court explicitly clarified that the issue regarding the validity of the impugned notifications (Notification No. 56/2023-Central Tax) remains open and any order passed by the Appellate Authority shall be subject to the ultimate outcome of the Supreme Court’s decision in S.L.P No. 4240/2025.
The Delhi High Court also ensured that all rights and remedies of the parties are preserved and directed that access to the GST Portal, if not already available, be provided to the petitioner to facilitate access to relevant notices and documents. The petition was thus disposed of in these terms, with all pending applications also being addressed. This judgment underscores the procedural importance of availing opportunities for personal hearings in tax adjudication processes.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
