🧾 Delhi High Court: Authorities Cannot Issue GST Demand Orders Without Considering Reply or Hearing Assessee
By Aaerm Law Associates | June 3, 2025
🔎 Introduction
In a landmark judgment that reinforces the principles of natural justice, the Delhi High Court has ruled that authorities under the Central Goods and Services Tax Act, 2017 (CGST Act) must consider the assessee’s reply and provide a personal hearing before issuing any adverse order. This decision strengthens procedural safeguards in GST adjudication and signals clear accountability in tax administration.
đź“‚ Case Background: Aviral Technology Solutions & Telecom Pvt. Ltd. v. Union of India
In the case W.P. (C) No. 4961 of 2025, Aviral Technology Solutions and Telecom Pvt. Ltd. filed a writ petition challenging an order under Section 73 of the CGST Act, issued by the Department of Trade & Taxes, Government of NCT of Delhi.
- The department issued a Show Cause Notice (SCN) dated December 14, 2023, for the financial year April 2018 to March 2019.
- The petitioner submitted a detailed reply along with supporting documents on February 26, 2024.
- Despite receiving this response, the Sales Tax Officer issued the final order on April 21, 2024, without acknowledging the reply or granting a personal hearing.
Feeling aggrieved, the petitioner moved the Delhi High Court, also raising questions about the validity of Notification Nos. 9/2023 and 56/2023, which extended the statutory time limit for passing orders under Section 73(9) of the CGST Act.
âš– Court Observations: Violations of Natural Justice
The Delhi High Court made the following key observations:
- The department ignored the reply and attached documents filed by the petitioner.
- Authorities did not grant a personal hearing, despite it being mandatory under Section 75(4) of the CGST Act.
- It remained unclear whether the GST portal showed any hearing notice or if it was communicated by any other means.
By failing to follow these steps, the department violated procedural due process, according to the Court.
đź“ś What the Law Says: Section 75(4) of the CGST Act
Section 75(4) clearly mandates that if the officer intends to issue an adverse order, they must grant an opportunity for a personal hearing. The Court highlighted that ignoring this mandate invalidates the adjudication process.
Further, Section 168A empowers the government to extend deadlines in exceptional situations such as force majeure. However, the petitioner contested the government’s use of this power in the absence of a current force majeure event.
🧑‍⚖ Court’s Final Directions
The Delhi High Court ruled decisively in favor of the petitioner:
- Set aside the impugned order dated April 21, 2024.
- Directed the Department to issue a fresh notice for personal hearing.
- Ordered the authorities to consider the petitioner’s reply and all relevant submissions before issuing any fresh decision.
- Held that any fresh order will remain subject to the outcome of the Supreme Court’s decision in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors., currently under Special Leave Petition No. 4240/2025.
đź“Ś Validity of Notifications 9/2023 and 56/2023: Still Pending Before Supreme Court
The case also brings into focus the controversial Notification Nos. 9/2023 and 56/2023, which the Central Government issued under Section 168A to extend the time limit for issuing orders under Section 73(9).
Several High Courts—such as Telangana, Allahabad, and Patna—have given differing interpretations on the legality of these notifications. In the Telangana HC ruling, the court interpreted the phrase “in respect of actions” under Section 168A broadly, allowing the extension for actions delayed during the COVID-19 pandemic. However, the validity of Notification No. 56/2023, which wasn’t ratified timely by the GST Council, remains especially contentious.
đź“š Legal Implications for Future GST Proceedings
This judgment sets a significant precedent in GST jurisprudence. It reaffirms the core values of due process, namely:
- Assessees must get a chance to be heard when facing adverse tax decisions.
- Authorities must review all submissions before passing final orders.
- Procedural lapses can render orders void, even when they deal with large revenue implications.
For both tax professionals and assessees, this decision stresses the importance of monitoring compliance not just with substantive tax laws but also with procedural safeguards.
🔚 Conclusion
The Delhi High Court’s judgment in the case of Aviral Technology Solutions sends a strong message to GST authorities: Natural justice is not optional. Administrative convenience or revenue considerations cannot override statutory requirements. Moving forward, this ruling is expected to guide tax officers in ensuring fair hearings and full consideration of responses, particularly in cases involving disputed tax demands.
The GST framework continues to evolve, and this ruling will remain a cornerstone case in shaping taxpayer rights and procedural integrity within India’s indirect tax regime.
