Delhi High Court defers GST notification challenge, directs appeal on merits pending Supreme Court outcome

Case Name

Bharat Construction and Tank Cleaner through its Proprietor Mr. Bharat Sharma v. Commissioner Delhi Goods and Service Tax and Others

(W.P.C. 7604/2025, decided on 28th May, 2025)

Key Takeaways

• Validity of GST Notifications Pending: The court did not decide on the validity of the challenged GST notifications (Notification Nos. 9/2023, 56/2023 - Central Tax, and 56/2023 - State Tax), as the issue is already before the Supreme Court in S.L.P No 4240/2025 (M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.).
• Opportunity to Appeal: The petitioner is allowed to file an appeal before the GST appellate authority by 15th July, 2025, and the appeal will not be dismissed as time-barred if filed by then.
• No Interference with Tax Order: The High Court found that the petitioner was given a fair chance to respond and attend a hearing, so it refused to set aside the tax order.
• Outcome Hinges on Supreme Court: Any decision by the appellate authority will be subject to the Supreme Court’s final ruling on the validity of the GST notifications.

Issue

Did the GST authorities follow proper procedure in issuing the show cause notice and order, and are the challenged GST notifications valid under the law?

Facts

• Parties: Bharat Construction & Tank Cleaner (petitioner) vs. Commissioner, Delhi Goods and Service Tax and Others (respondents).
• Timeline:
• 6th December, 2023: GST Show Cause Notice (SCN) issued for the tax period April 2018 to March 2019.
• 8th January, 2024: Petitioner filed a reply seeking more time to respond on merits.
• 9th March, 2024: Reminder notice sent, offering another chance to reply and attend a personal hearing.
• 12th April, 2024: Tax order passed, raising a demand of Rs. 17,85,040/-.
• Dispute: Petitioner claims the order was passed without a fair opportunity to reply or be heard. They also challenge the legal validity of certain GST notifications that extended deadlines for tax proceedings.

Arguments

Petitioner (Bharat Construction & Tank Cleaner)

• The GST order was passed without giving a real opportunity to reply or attend a personal hearing.
• The GST notifications (Nos. 9/2023, 56/2023 - Central Tax, and 56/2023 - State Tax) are invalid because:
• They were issued without following the proper procedure under Section 168A of the Central Goods and Services Tax Act, 2017.
• The required recommendation from the GST Council was not obtained before issuing some notifications.
• The notifications extended deadlines contrary to the law.

Respondents (GST Authorities)

• The petitioner was given sufficient opportunity to reply and attend a hearing, as shown by the reminder notice.
• The order was passed only after these opportunities were provided.
• The validity of the notifications is already under consideration by the Supreme Court, so the High Court should not decide on it now.

Key Legal Precedents & References

• Section 168A, Central Goods and Services Tax Act, 2017: Governs the extension of deadlines for GST proceedings, requiring GST Council recommendation.
• Notification Nos. 9/2023, 56/2023 (Central Tax), and 56/2023 (State Tax): These notifications extended time limits for GST adjudication and are under challenge.
• S.L.P No 4240/2025, M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.: The Supreme Court is considering the validity of these notifications, and several High Courts have taken differing views on the issue.
• W.P.C 16499/2023, DJST Traders Pvt. Ltd. v. Union of India and Ors.: Lead petition in a batch of cases challenging the same notifications.
• W.P.C 9214/2024, Engineers India Limited v. Union of India & Ors.: Lead matter for challenges to parallel State notifications.

Judgement

• No Interference with Order: The Delhi High Court found that the petitioner was given a fair chance to reply and attend a hearing, so it refused to set aside the GST order.
• Right to Appeal: The petitioner is allowed to file an appeal before the GST appellate authority by 15th July, 2025. If the appeal is filed with the mandatory pre-deposit by this date, it will be heard on merits and not dismissed as time-barred.
• Validity of Notifications Left Open: The court did not decide on the validity of the challenged GST notifications, leaving this issue to be determined by the Supreme Court in S.L.P No 4240/2025 and, for State notifications, in W.P.© 9214/2024.
• Observations Not Binding: The High Court’s observations in this case will not affect the appellate authority’s decision.

FAQs

Q1: What happens to the GST order against Bharat Construction & Tank Cleaner?

A: The order stands, but the petitioner can appeal to the GST appellate authority by 15th July, 2025. The appeal will be heard on merits and not dismissed for being late if filed by then.

Q2: Did the court decide if the GST notifications are valid?

A: No, the Delhi High Court left this question open, as the Supreme Court is already considering the issue in S.L.P No 4240/2025.

Q3: What if the Supreme Court later finds the notifications invalid?

A: Any order by the appellate authority in this case will be subject to the Supreme Court’s final decision on the validity of the notifications.

Q4: Was the petitioner denied a fair hearing?

A: The court found that the petitioner was given a fair chance to reply and attend a hearing, so there was no denial of natural justice.

Q5: What should the petitioner do next?

A: File an appeal before the GST appellate authority by 15th July, 2025, along with the required pre-deposit.