Court Remands GST Case for Personal Hearing, Leaving Notification Validity Open

Case Name:

W.P.C 17674/2024 & CM APPL. 75225/2024

Key Takeaways:

• The court emphasized the importance of personal hearings in tax disputes.
• The validity of GST notifications is under scrutiny, with differing opinions from various High Court.
• The case highlights procedural fairness in administrative actions.

Issue:

Did the petitioner, Raj Kumar Aggarwal, receive a fair opportunity to present his case regarding the GST demand order, and what is the validity of the notifications issued under the GST Act?

Facts:

• The petitioner, Raj Kumar Aggarwal, challenged a Show Cause Notice dated December 15, 2023, and a demand order dated April 30, 2024, issued by the Sales Tax Officer.
• The challenge included questioning the validity of Notification No. 56/2023-Central Tax dated December 28, 2023, claiming it was ultra vires (beyond legal authority) to the Central Goods and Services Tax Act, 2017.
• The petitioner had passed away before the demand order was issued, raising concerns about the lack of a personal hearing.

Arguments:

• Petitioner’s Argument: The petitioner argued that the notifications were issued without following proper procedures, particularly lacking prior recommendations from the GST Council as required under Section 168A of the GST Act. They also claimed that the notifications were issued after the expiration of the limitation period.
• Respondent’s Argument: The Union of India did not provide an appearance, leaving the petitioner’s claims unchallenged in this instance.

Key Legal Precedents:

• The court referenced Section 168A of the Central Goods and Services Tax Act, 2017, which mandates prior recommendations from the GST Council for extending deadlines.
• The court noted differing opinions from various High Courts regarding the validity of the notifications, including:
• The Allahabad High Court upheld Notification No. 9.
• The Patna High Court upheld Notification No. 56.
• The Guwahati High Court quashed Notification No. 56.
• The Telangana High Court made observations regarding the invalidity of Notification No. 56, which is currently under consideration by the Supreme Court in S.L.P No. 4240/2025.

Judgement:

The High Court of Delhi set aside the impugned order and remanded the matter for reconsideration by the Adjudicating Authority, emphasizing the need for a personal hearing. The court left the validity of the notifications open for future determination, ensuring that the petitioner would have the opportunity to present their case adequately.

FAQs:

Q1: What does it mean that the court remanded the case?

A: Remanding the case means the court sent it back to the lower authority (Adjudicating Authority) for further consideration, ensuring the petitioner gets a chance for a personal hearing.

Q2: What is the significance of the court’s decision regarding personal hearings?

A: The court highlighted that personal hearings are crucial for ensuring fairness in administrative proceedings, especially in tax matters.

Q3: What happens next regarding the validity of the GST notifications?

A: The validity of the notifications remains unresolved and will be subject to future court decisions, particularly the outcome of the Supreme Court’s review in S.L.P No. 4240/2025.

Q4: Why is there a difference in opinions among various High Courts?

A: Different High Court may interpret the law and the facts of similar cases differently, leading to varying conclusions about the validity of the same notifications. This case illustrates the need for a unified approach, which may be addressed by the Supreme Court.