WRIT PETITION 2351/2025 on 28 December 2023

1. This hearing has been done through hybrid mode.

2. The present petition has been filed by the Petitioner- R.L. Enterprisesunder Article 226 and 227 of the Constitution of India inter alia, challengingthe Show Cause Notice dated 23[rd]May, 2024 (hereinafter ‘impugned SCN’)and order dated 30[th]August, 2024 (hereinafter ‘impugned order’).Additionally, the petition also challenges the vires of Notification No.56/2023-Central Tax dated 28th December, 2023, issued by the CentralBoard of Indirect Taxes and Customs (hereinafter ‘impugned notification’).3.Today, at the outset, ld. Counsel for the Petitioner, on instructions,submits that he does not wish to press for prayer (b) and (d) which read asunder:

“b) Issue a writ of declaration or any other writ, orderor direction in the nature thereof declaring Section16(2)( c) of the CGST Act, 2017 /DGST Act, 20 I 7 asultra vires to the Constitution of India, 1950; ***********

(d) Issue an appropriate writ, order or direction todeclare the orders dated 09.08.2024, 16.11.2023,07.11.2023, 16.10.2023 and 29.09.2023 issued by theDepartment of Trade and Taxes, Government ofNational Capital Territory of Delhi, as ultra viresbeing beyond the provisions of the parent Act. i.e.,Delhi Goods and Service Tax Act, 2017.”

4. The impugned notification was under consideration before this Courtin 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 impugnednotifications and accordingly, the following order was passed:

“4.Submissions have been heard in part. The broadchallenge to both sets of Notifications is on the groundthat the proper procedure was not followed prior to theissuance of the same. In terms of Section 168A, priorrecommendation of the GST Council is essential forextending deadlines. In respect of Notification no.9, therecommendation was made prior to the issuance of thesame. However, insofar as Notification No. 56/2023(Central Tax) the challenge is that the extension wasgranted contrary to the mandate under Section 168A ofthe Central Goods and Services Tax Act, 2017 andratification was given subsequent to the issuance of thenotification. The notification incorrectly states that it wason the recommendation of the GST Council. Insofar asthe Notification No. 56 of 2023 (State Tax) is concerned,the challenge is to the effect that the same was issued on11th July, 2024 after the expiry of the limitation in termsof the Notification No.13 of 2022 (State Tax).

5. In fact, Notification Nos. 09 and 56 of 2023(Central Tax) were challenged before various other HighCourts. The Allahabad Court has upheld the validity ofNotification no.9. The Patna High Court has upheld thevalidity of Notification no.56. Whereas, the Guwahati High Courthas quashed Notification No. 56 of 2023(Central Tax).

6. The Telangana High Courtwhile not delving intothe vires of the assailed notifications, made certainobservations in respect of invalidity of Notification No.56 of 2023 (Central Tax).This judgment of theTelanganaHighCourtisnowpresentlyunderconsideration by the Supreme Court in S.L.P No4240/2025titledM/sHCC-SEW-MEIL-AAGJVv.Assistant Commissioner of State Tax & Ors. TheSupreme Court vide order dated 21st February, 2025,passed the following order in the said case:

“1. The subject matter of challenge before theHigh Court was to the legality, validity andpropriety of the Notification No.13/2022 dated 5-7-2022 & Notification Nos.9 and 56 of 2023 dated31-3-2023 & 8-12-2023 respectively.

2. However, in the present petition, we areconcerned with Notification Nos.9 & 56/2023dated 31-3-2023 respectively.

3. These Notifications have been issued in thepurported exercise of power under Section 168 (A)of the Central Goods and Services Tax Act. 2017(for short, the "GST Act").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 learnedSenior counsel appearing for the petitioner.Senior counsel appearing for the petitioner.

5. The issue that falls for the consideration of this Court is whether the time limit for adjudication ofshow cause notice and passing order under Section73 of the GST Act and SGST Act (Telangana GSTAct) for financial year 2019-2020 could have beenextended by issuing the Notifications in questionunder Section 168-A of the GST Act.

6. There are many other issues also arising forconsideration in this matter.

7. Dr. Muralidhar pointed out that there is acleavage of opinion amongst different High Courtsof 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 pendingbefore the Bombay High Courtand the Punjab andHaryana High Court . In the Punjab and Haryana HighCourt vide order dated 12th March, 2025, all the writpetitions have been disposed of in terms of the interimorders passed therein. The operative portion of the saidorder reads as under:

“65. Almost all the issues, which have been raisedbefore us in these present connected cases andhave been noticed hereinabove, are the subjectmatter of the Hon'ble Supreme Court in theaforesaid SLP.before us in these present connected cases andhave been noticed hereinabove, are the subjectmatter of the Hon'ble Supreme Court in theaforesaid SLP.

66. Keeping in view the judicial discipline, werefrain from giving our opinion with respect to thevires of Section 168-A of the Act as well as thenotifications issued in purported exercise of powerunder Section 168-A of the Act which have beenchallenged, and we direct that all these presentconnected cases shall be governed by the judgmentpassed by the Hon'ble Supreme Court and thedecision thereto shall be binding on these casestoo.refrain from giving our opinion with respect to thevires of Section 168-A of the Act as well as thenotifications issued in purported exercise of powerunder Section 168-A of the Act which have beenchallenged, and we direct that all these presentconnected cases shall be governed by the judgmentpassed by the Hon'ble Supreme Court and thedecision thereto shall be binding on these casestoo.

67. Since the matter is pending before the Hon'bleSupreme Court, the interim order passed in thepresent cases, would continue to operate andwould be governed by the final adjudication by theSupreme Court on the issues in the aforesaid SLP-4240-2025.Supreme Court, the interim order passed in thepresent cases, would continue to operate andwould be governed by the final adjudication by theSupreme Court on the issues in the aforesaid SLP-4240-2025.

68. In view of the aforesaid, all these connectedcases are disposed of accordingly along withpending applications, if any.”

8. The Court has heard ld. Counsels for the parties

for a substantial period today. A perusal of the abovewould show that various High Courts have taken a viewand the matter is squarely now pending before theSupreme Court.would show that various High Courts have taken a viewand the matter is squarely now pending before theSupreme Court.

9. Apart from the challenge to the notificationsitself, various counsels submit that even if the same areupheld, they would still pray for relief for the parties asthe Petitioners have been unable to file replies due toseveral reasons and were unable to avail of personalhearings in most cases. In effect therefore in most cases-the adjudication orders are passed exparte. Hugedemands have been raised and even penalties have beenimposed.10.Broadly, there are six categories of cases whicharependingbeforethisCourt.Whiletheissueconcerning the validity of the impugned notifications ispresently under consideration before the SupremeCourt, this Court is of the prima facie view that,depending upon the categories of petitions, orders canbe passed affording an opportunity to the Petitioners toplace their stand before the adjudicating authority. Insome cases, proceedings including appellate remediesmay be permitted to be pursued by the Petitioners,without delving into the question of the validity of thesaid notifications at this stage.11.The said categories and proposed reliefs havebeen broadly put to the parties today. They may seekinstructions and revert by tomorrow i.e., 23rd April,2025.”

5. Thereafter, on 23rd April, 2025, this Court, having noted that thevalidity of the impugned notifications is under consideration before theSupreme Court, had disposed of several matters in the said batch of petitionsafter addressing other factual issues raised in the respective petitions.Additionally, while disposing of the said petitions, this Court clearlyobserved that the validity of the impugned notifications therein shall besubject to the outcome of the proceedings before the Supreme Court.

6. On facts, the submission of the Petitioner is that the impugned SCN

dated 23[rd]May, 2024 is completely non-speaking and vague in nature. It issubmitted that the impugned SCN does not present any independentinvestigation and ismerely an auto-generatedsummary of allegeddiscrepancies in the returns of the Petitioner. This, according to thePetitioner, is in violation of the Principles of Natural Justice and renders theimpugned SCN liable to be set aside.

7. Heard. The Court has perused the records. It is noticed that no reply tothe impugned SCN dated 23[rd]May, 2024 has been filed despite time beinggranted on 23[rd]July, 2024. On a query raised to the ld. Counsel for thePetitioner regarding the same, it is conceded that there was a lapse on its partin not filing the replies. On a query as to the reason for the demand beingraised, the Petitioner submits that the GST registration of the dealers hasbeen cancelled. However, it is prayed that the Petitioner wishes to defendthe matter on merits.

8. Considering the above circumstances, and the fact that the challengeto the impugned notification is pending before the Supreme Court, thematter is relegated back to the Adjudicating Authority for the Petitioner tobe provided another opportunity to present its case on merits subject topayment of Rs. 20,000/- to be paid to Delhi High Court Bar Association inthe following account.

Name: Delhi High Court Bar Association

A/c No: 15530100000478

IFSC Code: [REDACTED]

Bank & Branch: UCO Bank, Delhi High Court.

9. The Petitioner is allowed to file a reply by 10[th]July, 2025. Upon filingof the reply and proof of payment of costs, the Adjudicating Authority shall grant the Petitioner a personal hearing, and the notice for the same shall beissued to the Petitioner at the following Email ID and Phone number:

Email ID:[REDACTED]

Phone number: [REDACTED]

10. Thereafter, let the comprehensive adjudication order be passed by theAdjudicatingAuthorityonmeritsuponconsideringthereplyandsubmissions of the Petitioner.

11. All the rights and remedies of the parties are left open. Access to theGST Portal, if not already available, shall be ensured to be provided to thePetitioner to enable filing of reply and access to the notices and relateddocuments.

12. However, it is again made clear that the issue in respect of the validityof the impugned notifications is left open and the order of the AdjudicatingAuthority shall be subject to the outcome of the decision of the SupremeCourt in S.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 ifany, are also disposed of.

PRATHIBA M. SINGHJUDGE

MAY 07, 2025/da/Ar.

(corrected & released on 15[th]May, 2025)

RAJNEESH KUMAR GUPTAJUDGE