Introduction
In a significant ruling dated 16th May 2025, the High Court of Delhi set aside an order passed by the Sales Tax Officer, Ward 56, Zone 4, Delhi, in the case of M/s Mascon vs. Commissioner of Delhi Goods and Services Tax. The Court held that the petitioner was not given a proper opportunity to respond to the Show Cause Notice (SCN), leading to an ex-parte order.
Background of the Case
The petitioner, M/s Mascon, challenged:
- A Show Cause Notice dated 29th May 2024
- The subsequent order dated 7th August 2024
- The validity of GST Notifications No. 56/2023-Central Tax and 56/2023-State Tax
The case was heard by Justices Prathiba M. Singh and Rajneesh Kumar Gupta through hybrid mode.
Key Legal Issues
- Challenge to GST Notifications
- The petitioner contested the legality of Notification No. 56/2023, arguing that it was issued without following proper procedures under Section 168A of the CGST Act, 2017.
- The Court noted that the Supreme Court is already examining this issue in SLP No. 4240/2025 (M/s HCC-SEW-MEIL-AAG JV vs. Assistant Commissioner of State Tax).
- Lack of Opportunity to Respond
- The petitioner failed to file a reply to the SCN, leading to an ex-parte order.
- The Court observed that reminder notices (9th July 2024 & 20th July 2024) were issued, but no reply was submitted.
- Remand to Adjudicating Authority
- The Court set aside the impugned order and granted the petitioner time till 10th July 2025 to file a reply.
- The Adjudicating Authority must conduct a fresh hearing and pass a new order.
Court’s Decision
- The impugned order was quashed, and the matter was remanded for reconsideration.
- The petitioner must file a reply by 10th July 2025, after which a personal hearing will be granted.
- The final order will be subject to the Supreme Court’s decision on the validity of GST Notifications.
Implications of the Judgement
- Fair Hearing Rights – The ruling reinforces the principle that taxpayers must be given a reasonable opportunity to present their case.
- Pending Supreme Court Decision – The validity of GST Notifications No. 56/2023 remains uncertain until the Supreme Court delivers its verdict.
- Judicial Discipline – The Delhi High Court refrained from ruling on the vires of the Notifications, respecting the pending Supreme Court case.
Conclusion
The Delhi High Court’s decision in M/s Mascon’s case highlights the importance of procedural fairness in GST adjudication. Businesses facing GST disputes should ensure they respond promptly to SCNs and seek legal recourse if denied a fair hearing.
For updates on the Supreme Court’s ruling on GST Notifications, stay tuned to Taxation Advisor legal news platforms.
