Kurlon Retail Limited Vs Sales Tax Officer & Ors. (Delhi High Court)
The Delhi High Court held that GST adjudication based on notices uploaded only on the “Additional Notices & Orders” tab of the GST portal, without effective communication or a meaningful opportunity of hearing, violates principles of natural justice. The case involved a ₹31.58 lakh demand for FY 2019–20 arising from disputed input tax credit, where the show cause notice, reminders, and order were not acted upon as no reply or hearing occurred. The Court stressed that fairness requires more than a technical portal upload; authorities must ensure actual notice and schedule a personal hearing, including communication through email or mobile. Although the tab was visible after January 16, 2024, the impugned order was passed without considering submissions. Accordingly, the ex-parte order was set aside and the matter remanded for fresh adjudication. The Court clarified that the outcome remains subject to the pending decision of the Supreme Court of India on the validity of GST limitation-extension notifications.
Facts:
Kurlon Retail Limited (“the Petitioner”) is a registered assessee under GST, facing a demand of ₹31.58 lakhs for the 2019-20 FY, involving disputed Input Tax Credit (ITC).
Sales Tax Officer & Ors. (“the Respondent”) issued a show cause notice (SCN), reminders, and adjudication order demanding the amount; these were only uploaded on the GST portal’s “Additional Notices & Orders” tab.
The Petitioner contended that the manner of notice deprived them of a fair chance to reply and be heard, as the SCN and reminders were not visible in the default notices tab and thus went unnoticed. They challenged the resulting ex parte order for natural justice violations, and also questioned the validity of Notification No. 56/2023-Central Tax and related state notifications extending limitation.
The Respondent contended that after January 16, 2024, the “Additional Notices & Orders” tab became visible to assessees, and that the Petitioner had opportunity to respond and attend a personal hearing; absence of reply or appearance justified the ex parte order.
The Petitioner filed a writ petition challenging both the order’s vires and the process, also raising the statutory challenge to the extension notification before the High Court.
Issue:
Whether an adjudication order based on a show cause notice and reminders only uploaded to the “Additional Notices & Orders” tab of the GST portal, without effective notice or opportunity to be heard, is valid?
Held:
The Hon’ble Delhi High Court in W.P.(C) 13121/2025 held as under:
- Observed that, failure to give effective notice and proper opportunity to reply or be heard, whether due to portal limitations or other reasons clearly violates the principles of natural justice.
- Noted that, although “Additional Notices & Orders” tab was made visible on the GST portal post January 16, 2024, and was accessible at the time in question, the impugned order was passed without considering any reply or submissions of the Petitioner.
- Held that, fairness requires not only notice to be uploaded in the portal, but actual notice and scheduling of a personal hearing, with notices to be sent via e-mail/mobile in addition to portal upload.
- Set aside the impugned order and granted the Petitioner time till September 30, 2025 to file a reply, with the Adjudicating Authority directed to fix a personal hearing and consider all submissions afresh.
Our Comments:
The Delhi High Court’s judgment in Kurlon Retail Limited v. Sales Tax Officer & Ors. [W.P.(C) 13121/2025, order dated August 28, 2025] came against the backdrop of judicial scrutiny concerning Notifications expressly extending limitation periods for GST adjudication, particularly Notification No. 56/2023-Central Tax dated December 28, 2023 and Notification No. 56/2023-State Tax dated July 11, 2024. These notifications purported to extend the time limits under Section 73(9) of the CGST Act, regarding adjudication of show cause notices for financial years 2018-19 and 2019-20.
The validity of such notifications has been contested across courts, giving rise to divergent rulings. The Madras High Court, in a notable case involving Ms Tata Play Limited vs Union of India [W.P.Nos.17184 of 2024 order dated June 12, 2025], declared these extension notifications ultra vires Section 168A of the CGST Act. The Court reasoned that extensions under Section 168A could be validly granted only during force majeure conditions, such as the COVID-19 pandemic, and required prior recommendation of the GST Council. The Madras High Court found that these conditions were not met, particularly, the GST Council’s recommendation was retrospective rather than contemporaneous, thus invalidating the notifications. Consequently, the Court quashed all related proceedings predicated upon such extensions.
In the case of M/s Barkataki Print and Media Services v. Union of India & Ors. [WP(C)/3585/2024 dated September 09, 2024], the Gauhati High Court declared Notification No. 56/2023 dated December 28, 2023, as ultra vires. The Court held that since the notification lacked the essential prior recommendation of the GST Council, as required by Section 168A of the CGST Act, and did not adequately demonstrate exceptional circumstances such as a force majeure event, it exceeded the authority granted by the statute. This judgment importantly protects taxpayers who relied on regulatory timelines, ensuring that administrative attempts to extend limitation periods improperly are subject to judicial review and can be invalidated.
In Siemens-Gamesa v. Deputy Commissioner of Commercial Taxes [Writ Petition No. 31388/2024 decided December 10, 2024], the Karnataka High Court stayed recovery proceedings arising from demand notices based on the contentious Notification issued under Section 168A of the CGST Act and its corresponding State notification. The Court emphasized that the extension of limitation periods without an effective and timely recommendation from the GST Council violates the legislative framework. It also highlighted that the petitioner had not exhausted legal remedies against the original refund order, citing the principles of res judicata and the constitutional guarantee of equality and fairness under Article 14. The ruling indicates judicial caution in endorsing administrative extensions of time for adjudication.
Relevant Provisions:
Section 73(9), Central Goods and Services Tax Act, 2017:
“The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order within three years from the due date for furnishing the annual return for the relevant financial year.”
Section 168A, Central Goods and Services Tax Act, 2017:
“Where, in the opinion of the Government, it is necessary to do so due to force majeure or other exceptional circumstances, the Government may, on the recommendation of the Council, by notification, extend the time limit specified in, or prescribed or notified under, this Act in respect of actions specified therein.”
Notification No. 56/2023-Central Tax, dated December 28, 2023:
“….. the Government, on the recommendations of the Council, hereby, extends the time limit specified under sub- section (10) of section 73 for issuance of order under sub-section (9) of section 73 of the said Act, for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilized, relating to the period as specified below, namely:–
- for the financial year 2018-19, up to the 30th day of April, 2024;
- for the financial year 2019-20, up to the 31st day of August, 2024.”
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This hearing has been done through hybrid mode.
2. The present petition has been filed, inter alia, challenging the impugned order dated 21st August, 2024 passed in respect of Financial Year 2019-20 by the office of Sales Tax Officer Class II/ AVATO, Delhi, raising a demand of Rs. 31,58,436/- under the head of ‘net access ITC availed’. The petition also challenges the vires of Notification No. 56/2023-Central Tax dated 28th December, 2023 and Notification No. 56/2023-State Tax dated 7th July, 2024 (hereinafter ‘impugned notifications’).
3. The validity of the impugned notifications was under consideration before this Court in a batch of petitions with the lead petition being P.(C) 16499/2023 titled ‘DJST Traders Pvt. Ltd. vs. Union of India and Ors.’ In the said batch of petitions, on 22nd April 2025, the parties were heard at length qua the validity of the impugned notifications and accordingly, the following order was passed:
“4. Submissions have been heard in part. The broad challenge to both sets ofNotifications is on the ground that the proper procedure was not followed prior to the issuance of the same. In terms of Section 168A, prior recommendation of the GST Council is essential for extending deadlines. In respect of Notification no.9, the recommendation was made prior to the issuance of the same. However, insofar as Notification No. 56/2023 (Central Tax) the challenge is that the extension was granted contrary to the mandate under Section 168A ofthe Central Goods and Services Tax Act, 2017 and ratification was given subsequent to the issuance of the notification. The notification incorrectly states that it was on the recommendation of the GST Council. Insofar as the Notification No. 56 of 2023 (State Tax) is concerned, the challenge is to the effect that the same was issued on 11th July, 2024 after the expiry of the limitation in terms of the Notification No.13 of 2022 (State Tax).
5. In fact, Notification Nos. 09 and 56 of2023 (Central Tax) were challenged before various other High Courts. The Allahabad Court has upheld the validity of Notification no.9. The Patna High Court has upheld the validity of Notification no.56. Whereas, the Guwahati High Court has quashed Notification No. 56 of 2023 (Central Tax).
6. The Telangana High Court while not delving into the vires of the assailed notifications, made certain observations in respect of invalidity ofNotification No. 56 of 2023 (Central Tax). This judgment of the Telangana High Court is now presently under consideration by the Supreme Court 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 vide order dated 21st February, 2025, passed the following order in the said case:
“1. The subject matter of challenge before the High Court was to the legality, validity and propriety of the Notification No.13/2022 dated 5-7-2022 & Notification Nos.9 and 56 of 2023 dated 31-3-2023 & 8-12-2023 respectively.
2. However, in the present petition, we are concerned with Notification Nos.9 & 56/2023 dated 31-3-2023 respectively.
3. These Notifications have been issued in the 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 learned Senior counsel appearing for the petitioner.
5. The issue that falls for the consideration of this Court is 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.
6. There are many other issues also arising for consideration in this matter.
7. Dr. Muralidhar pointed out that there is a cleavage of opinion amongst different High Courts of the country. 8. Issue notice on the SLP as also on the prayer for interim relief, returnable on 7-32025.”
7. In the meantime, the challenges were also pending before the Bombay High Court and the Punjab and Haryana High Court. In the Punjab and Haryana High Court vide order dated 12th March, 2025, all the writ petitions have been disposed of in terms of the interim orders passed therein. The operative portion of the said order reads as under:
“65. Almost all the issues, which have been raised before us in these present connected cases and have been noticed hereinabove, are the subject matter of the Hon’ble Supreme Court in the aforesaid SLP.
66. Keeping in view the judicial discipline, we refrain from giving our opinion with respect to the vires of Section 168-A of the Act as well as the notifications issued in purported exercise ofpower under Section 168-A of the Act which have been challenged, and we direct that all these present connected cases shall be governed by the judgment passed by the Hon’ble Supreme Court and the decision thereto shall be binding on these cases too.
67. Since the matter is pending before the Hon’ble Supreme Court, the interim order passed in the present cases, would continue to operate and would be governed by the final adjudication by the Supreme Court on the issues in the aforesaid SLP-4240-2025.
68. In view of the aforesaid, all these connected cases are disposed of accordingly along with pending applications, if any.”
8. The Court has heard ld. Counsels for the parties for a substantial period today. A perusal of the above would show that various High Courts have taken a view and the matter is squarely now pending before the Supreme Court.
9. Apart from the challenge to the notifications itself, various counsels submit that even if the same are upheld, they would still pray for relief for the parties as the Petitioners have been unable to file replies due to several reasons and were unable to avail ofpersonal hearings in most cases. In effect therefore in most cases the adjudication orders are passed ex-parte. Huge demands have been raised and even penalties have been imposed.
10. Broadly, there are six categories of cases which are pending before this Court. While the issue concerning the validity of the impugned notifications is presently under consideration before the Supreme Court, this Court is ofthe primafacie view that, depending upon the categories of petitions, orders can be passed affording an opportunity to the Petitioners to place their stand before the adjudicating authority. In some cases, proceedings including appellate remedies may be permitted to be pursued by the Petitioners, without delving into the question of the validity of the said notifications at this stage.
11. The said categories and proposed reliefs have been broadly put to the parties today. They may seek instructions and revert by tomorrow i.e., 23rd April, 2025.”
4. Thereafter, on 23rd April 2025, this Court, having noted that the validity of the impugned notifications is under consideration before the Supreme Court, had disposed of several matters in the said batch of petitions after addressing other factual issues raised in the respective petitions. Additionally, while disposing of the said petitions, this Court clearly observed that the validity of the impugned notifications therein shall be subject to the outcome of the proceedings before the Supreme Court.
5. However, in cases where the challenge is to the parallel State Notifications, the same have been retained for consideration by this Court. The lead matter in the said batch is P.(C) 9214/2024 titled ‘Engineers India Limited v. Union ofIndia & Ors’.
6. In the present case, the submission of the Petitioner, on facts, is that the SCN dated 17th May, 2024, from which the impugned order arises, was uploaded on the ‘Additional Notices Tab’. Thereafter, reminders were issued to the Petitioner on 16th July, 2024 and 30th July, 2024 and the same are also stated to be uploaded on ‘Additional Notices Tab’. Therefore, the same was not brought to the knowledge of the Petitioner due to which no reply was filed. Hence, the impugned order was passed without providing the Petitioner with an opportunity to challenge the case on merits.
7. Further, it is submitted on behalf of the Department that the SCN dated 17th May, 2024, was uploaded after the issue with the ‘Additional Notices Tab’ was fixed and thus, the argument is not sustainable. Further, it is submitted that the opportunity for personal hearing was also afforded to the Petitioner. However, the same was not attended and thus, the impugned order was passed.
8. The Court has heard the parties. In fact, this Court in P.(C) 13727/2024 titled ‘Neelgiri Machinery through its Proprietor Mr. Anil Kumar V. Commissioner Delhi Goods And Service Tax And Others’, under similar circumstances where the SCN was uploaded on the ‘Additional Notices Tab’ had remanded the matter in the following terms:
“6. Be that as it may, intention is to ensure that the Petitioner is given an opportunity to file its reply and is heard on merits and that orders are not passed in default. Since there is no clarity on behalf of the Department, this Court follows the order dated 9th September, 2024 in Satish Chand Mittal (Trade Name National Rubber Products) vs. Sales Tax Officer SGST, Ward 25-Zone 1 as also order dated 23rd December, 2024 in Anant Wire Industries vs. Sales Tax Officers Class II/Avato, Ward 83 & Anr (W.P.(C) 17867/2024; DHC) where the Court under similar circumstances has remanded back the matter to ensure the Noticee/Petitioners get a fair opportunity to be heard. The order of the Court in Sathish Chand Mittal (Supra) reads as under:
“4. It is the petitioner’s case that he had not received the impugned SCN and, therefore, he had no opportunity to respond to the same. For the same reason, the petitioner claims that he had not appear for a personal hearing before the Adjudicating Authority, which was scheduled on 17.10.2023 and later rescheduled to 30.11.2023 as per the Reminder.
5. The petitioner also states that the impugned SCN, the Reminder and the impugned order are unsigned.
6. Mr. Singhvi, the learned counsel appearing for the respondent, on advance notice, fairly states that the principal issue involved in the present case is squarely covered by the decisions of this Court in M/s ACE Cardiopathy Solutions Private Ltd. v. Union ofIndia & Ors.: Neutral Citation No. 2024:DHC:4108-DB as well as in Kamla Vohra v. Sales Tax Officer Class II/ Avato Ward 52 : Neutral Citation No.2024:DHC:5108- DB.
7. He states that possibly, the petitioner did not had the access of the Notices as they were projected on the GST Portal under the tab ‘Additional Notices & Orders’. He submits that the said issue has now been addressed and the ‘Additional Notices & Orders’ tab is placed under the general menu and adjacent to the tab ‘Notices & Orders’.
8. In view of the above, the present petition is allowed and the impugned order is set aside.
9. The respondent is granted another opportunity to reply to the impugned SCN within a period of two weeks from date. The Adjudicating Authority shall consider the same and pass such order, as it deems fit, after affording the petitioner an opportunity to be heard. 10. The present petition is disposed of in the aforesaid terms. 11. All pending applications are also disposed of.”
7. The impugned demand orders dated 23rd April, 2024 and 5th December, 2023 are accordingly set aside. In response to show cause notices dated 04th December, 2023 and 23th September, 2023, the Petitioner shall file its replies within thirty days. The hearing notices shall now not be merely uploaded on the portal but shall also be e-mailed to the Petitioner and upon the hearing notice being received, the Petitioner would appear before the Department and make its submissions. The show cause notices shall be adjudicated in accordance with law.
8. The petitions are disposed of in the above terms. The pending application(s), if any, also stand disposed of.”
9. There is no doubt that after 16th January 2024, changes have been made to the GST portal and the ‘Additional Notices Tab’ has been made visible. In the present case, the SCN was issued on 17th May, 2024. A perusal of the screenshot of the GST Portal of the Petitioner also clearly shows that the ‘Additional Notices Tab’ is clearly visible and accessible to the Petitioner. The same is extracted herein below:
10. Hence, the argument of the Petitioner pertaining to ‘Additional Notices Tab’ is not tenable in the present case. However, considering the fact that the impugned order was passed without hearing the submissions and contentions of the Petitioner and since the impugned notifications are under challenge before the Supreme Court, as also this Court, the Court deems it appropriate to set aside the impugned order.
11. Accordingly, the impugned order is set aside. The Petitioner is granted time till 30th September, 2025 to file the reply to the SCN. Upon filing of the reply, the Adjudicating Authority shall issue a notice for personal hearing to the Petitioner. The personal hearing notice shall be communicated to the Petitioner on the following mobile no. and e-mail address:
- Email: mishra@jsalaw.com
- Mobile No.: 9818776660
12. The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and fresh orders with respect to both the SCNs shall be passed accordingly.
13. However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. and of this Court in W.P.(C) 9214/2024 titled Engineers India Limited v. Union ofIndia &Ors.
14. All rights and remedies of the parties are left open. Access to the GST Portal, shall be provided within one week, to the Petitioner to enable uploading of the reply as also access to the notices and related documents.
15. The present writ petition is disposed of in above terms. All the pending applications, if any, are also disposed of.
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