GST Notice Not Served Properly: Delhi High Court Quashes GST
Order for Denial of Opportunity to Respond
Summary of
the Case
In a major decision
safeguarding the right to fair hearing under GST law, the Delhi High Court
quashed a GST demand order issued against M/s Ambadeep Estates Pvt. Ltd.,
holding that the order was passed without granting the petitioner a proper
opportunity to file a reply. The petitioner contended that the Show Cause
Notice (SCN) was uploaded on the GST portal in a manner that was
inaccessible to them, specifically under the “Additional Notices and Orders”
tab, which they were unaware of.
The Court accepted the
contention and observed that the GST portal’s architecture at the time
prevented the taxpayer from effectively responding. Applying principles of
natural justice and referring to an earlier judgment in Carona Electricals
v. Commissioner, DGST, the Court set aside the DRC-01 dated 08.12.2023
and DRC-07 order dated 31.03.2024, and remanded the matter back for
fresh adjudication.
Case
Information
- Case Title:
M/s Ambadeep Estates Pvt. Ltd. vs. Commissioner of GST Delhi & Anr.
- Case Number:
W.P.(C) 2484/2025 & CM APPL. 11753/2025
- Date of Judgment:
27 March 2025
Facts of
the Case
1. Issuance
of SCN:
o The
petitioner was issued a Show Cause Notice (SCN) in Form DRC-01
dated 08 December 2023, concerning alleged GST discrepancies for the Financial
Year 2018–19.
2. No
Access to SCN:
o The
petitioner claimed that it was not able to view the SCN as it was
uploaded on the GST portal only under the "Additional Notices and
Orders" tab—a less accessible section.
o Consequently,
the petitioner was precluded from filing a reply to the notice.
3. Ex
Parte Order Passed:
o The
GST authorities, assuming that no reply was submitted, proceeded to issue a final
demand order (Form DRC-07) dated 31 March 2024, without giving the
petitioner an opportunity for a personal hearing or defense.
4. Writ
Petition Filed:
o Aggrieved
by the ex parte adjudication, M/s Ambadeep Estates Pvt. Ltd. filed
W.P.(C) 2484/2025 before the Delhi High Court, seeking:
§ Quashing
of the SCN and final order;
§ Alternatively,
direction to permit filing of a reply and granting of personal hearing;
§ Option
to file a delayed appeal under Section 107 of the CGST Act if remand was not
possible.
Petitioner's
Submissions
The petitioner raised the
following key legal arguments:
- Technical Inaccessibility:
- The SCN was placed under the “Additional
Notices and Orders” tab, not the “General Notices” tab of the GST
portal.
- Until portal architecture was
modified on 16 January 2024, taxpayers were often unaware of such
postings.
- Violation of Natural Justice:
- The final order was passed without
a hearing or the petitioner’s knowledge of the SCN.
- The action was in direct violation
of principles of natural justice and Section 75(4) of the
CGST Act, which mandates opportunity of hearing.
- Reference to Carona Electricals
Judgment:
- The petitioner relied on the Delhi
High Court’s decision in W.P.(C) 8356/2024, where the court had
quashed a similar ex parte GST order due to inaccessibility of the SCN.
Respondent’s
Submissions
The GST Department,
represented by government counsel, defended the issuance of the SCN and final
order, but:
- Did not refute the claim
that the SCN was placed in the "Additional Notices" tab.
- Acknowledged
that the GST portal architecture was later modified to show notices in the
“General Notices” tab from 16 January 2024.
- Could not justify why the petitioner
was not granted an opportunity of hearing or how effective service
of SCN had occurred in practice.
Judgment
and Analysis by the Court
1. Court Relied on Carona
Electricals Judgment:
The Bench cited its
earlier ruling in Carona Electricals through its Proprietor v. Commissioner
of DGST, where it was held that:
“The SCN came to be
placed in the ‘Additional Notices and Orders’ tab… depriving the petitioner of
a right to respond.”
The Court found that same
factual matrix applied in the present case.
2. System Deficiency
Adversely Impacted Taxpayer:
- The Bench noted that the GST
portal modification took place only on 16 January 2024, and the
petitioner had no fair chance to access the SCN prior to that date.
- The final order was passed before
the portal was corrected.
“In view of the
aforesaid, we find ourselves unable to sustain the final order…”
3. DRC-01 and DRC-07 Set
Aside:
The Court quashed both:
- DRC-01 dated 08.12.2023,
and
- DRC-07 dated 31.03.2024
These were held to be unsustainable
in law due to denial of opportunity to respond.
4. Matter Remanded for
Fresh Consideration:
The Court directed that
the matter be sent back to the Competent Authority for fresh
adjudication.
“The matter is remanded
back to the Respondents/Competent Authority to decide the issue afresh.”
5. Petition Disposed of:
With these directions,
the writ petition was allowed and disposed of.
Legal
Significance and Takeaways
|
Aspect
|
Judicial
Finding / Impact
|
|
Access
to SCNs on GST Portal
|
Notices
placed only under “Additional Notices” were deemed insufficient communication
before 16 Jan 2024.
|
|
Natural
Justice
|
Denial
of opportunity to reply or appear is a fundamental violation that vitiates
the adjudication process.
|
|
Systemic
Issues and Legal Rights
|
Courts
recognized that technical glitches on the GST portal cannot override
taxpayer rights.
|
|
Remedy
through Writ Jurisdiction
|
The
case reaffirms that High Courts will intervene under Article 226 when
taxpayers are denied due process.
|
Conclusion
The judgment in M/s
Ambadeep Estates Pvt. Ltd. vs. Commissioner of GST underscores a critical
aspect of tax law enforcement—notices must be effectively communicated, not
merely uploaded. The court acknowledged the technical limitations of
the GSTN portal and protected the taxpayer’s right to be heard.
By quashing the demand
and directing fresh proceedings, the Delhi High Court has set a valuable
precedent ensuring that technology does not undermine due process in GST
adjudication. This decision provides a relief template for other taxpayers
similarly affected by invisible or improperly served SCNs.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
Find the Attachment (Press on Click Here )
Click here
