DJST Traders Private Limited Vs Union Of India & Ors. (Delhi High Court)

The legal challenge surrounding the extension of deadlines for issuing GST show cause notices and orders has escalated to the Supreme Court, while the Delhi High Court in a related case addressed procedural fairness for a taxpayer.DJST Traders Private Limited approached the Delhi High Court challenging a show cause notice issued under Section 73 of the GST Act and a Central Government notification (Notification No. 9/2023-Central Tax dated March 31, 2023) that extended limitation periods. This petition is part of a larger group of cases contesting similar notifications, including Notification No. 56/2023-Central Tax.The core of the challenge to these notifications lies in the argument that the proper procedure under Section 168A of the CGST Act, 2017 was not followed. Section 168A allows the government to extend time limits in cases of ‘force majeure’ on the recommendation of the GST Council. Petitioners contend that the necessary recommendations either preceded the notifications improperly or, in the case of Notification No. 56/2023, ratification occurred after issuance, with the notification incorrectly stating it was based on a prior recommendation. Further, the invocation of ‘force majeure’ conditions post-2022 has also been questioned.Judicial precedents on this matter show a divergence of opinion among various High Courts. The Allahabad High Court has upheld the validity of Notification No. 9/2023, while the Patna High Court has affirmed Notification No. 56/2023. In contrast, the Guwahati High Court has quashed Notification No. 56/2023-Central Tax. The Telangana High Court also made observations suggesting the invalidity of Notification No. 56/2023-Central Tax, a decision now under challenge before the Supreme Court.The Supreme Court is currently seized of the matter in the case of M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. (SLP No 4240/2025), where the legality of Notification Nos. 9/2023 and 56/2023 is under examination, particularly focusing on whether the time limit for adjudication under Section 73 could be extended through these notifications under Section 168A. The Supreme Court has noted the differing views of the High Courts.Given the pending Supreme Court decision on the validity of the notifications, the Delhi High Court in the DJST Traders case acknowledged that its decision on this aspect would be subject to the Supreme Court’s outcome.However, the Delhi High Court also addressed the specific circumstances of the petitioner’s case. DJST Traders had challenged the notification after receiving a show cause notice. The court had initially allowed the adjudication to proceed but directed that no final order be implemented. Despite filing a reply to the show cause notice, the petitioner reportedly did not submit supporting documents, leading to an apparently brief adjudication order being passed during the petition’s pendency.Recognizing that many petitioners in similar cases faced challenges in filing replies or availing personal hearings, often resulting in ex-parte orders and significant demands, the Delhi High Court opted to provide an opportunity for procedural correction in the DJST Traders case.The court, without delving into the validity of the notifications at this stage, set aside the adjudication order dated December 31, 2023, in the DJST Traders matter. It directed that the petitioner be given a fresh opportunity to file a detailed reply along with relevant documents within 30 days. Following the submission of the reply, the Adjudicating Authority is required to grant the petitioner a personal hearing and pass fresh orders after considering the reply and the submissions made during the hearing.This approach by the Delhi High Court in individual cases aims to ensure taxpayers are afforded a proper opportunity to present their case before the adjudicating authority, irrespective of the broader legal debate surrounding the validity of the extended deadlines currently being considered by the Supreme Court. The final resolution of the notification validity is anticipated from the Supreme Court’s judgment.