GST Adjudication Time Limits Under Scrutiny: Delhi High Court Holds Off on Ruling Until Supreme Court Decides

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The Delhi High Court in Engineers India Limited v. Union of India dealt with a crucial challenge concerning the validity of certain Goods and Services Tax (GST) notifications that extended statutory time limits for adjudication under Section 73 of the CGST Act, 2017. The petitioner, Engineers India Limited, questioned the legality of Notification No. 09/2023 (State Tax) and related notifications issued under Section 168A, contending that they were promulgated without a proper recommendation from the GST Council—a prerequisite under the statute.

Given that the issue of validity of similar notifications is currently under consideration before the Supreme Court in M/s HCC–SEW–MEIL–AAG JV v. Assistant Commissioner of State Tax (SLP No. 4240 of 2025), the Delhi High Court chose to defer its decision and await the apex court’s ruling. However, while refraining from deciding the constitutional issue, the Court emphasized that procedural fairness must be preserved and taxpayers should not be denied a reasonable opportunity of hearing before adjudication.

This case highlights the broader tension between administrative efficiency and statutory compliance within the GST framework and underscores the judiciary’s cautious approach when similar issues are pending before the Supreme Court.

Case Background & Issues

  1. Part of Batch of Petitions Challenging GST Notifications
    The petition by Engineers India Ltd. is one of several writ petitions challenging certain GST notifications that extend time-limits for adjudication and passing final orders under Section 73 of the CGST/SGST Acts.
  2. Impugned Orders & Notifications
    • The petitioner challenges an adjudication order dated 30 April 2024 under Section 73.
    • The challenge also covers Notification No. 09/2023-State Tax (22 June 2023) in the NCT of Delhi.
    • More broadly, the petitions raise questions about Notification Nos. 9 and 56 of 2023 (Central Tax / State Tax), issued under Section 168A (or purportedly under it), which aim to extend statutory time-limits for GST adjudications.
  3. Core Legal Question — Section 168A & Role of GST Council
    • The crux is whether the impugned notifications validly extend the time limits under Section 168A of the CGST Act, 2017.
    • A key contention is that under Section 168A, any extension must be based on a prior recommendation of the GST Council. The petitioners argue the notifications either lacked valid recommendation or mis-stated the sequence or nature of the recommendation.
    • For example, for Notification 56/2023 (Central Tax), it is contended that the extension was made first, and then ratified, or that the notification improperly states it was based on the Council’s recommendation, which the petitioners say is legally deficient.
  4. Divergent High Court Decisions & Supreme Court’s Intervention
    • Various High Courts have taken differing views:
      • Allahabad HC upheld Notification No. 9/2023.
      • Patna HC upheld Notification No. 56/2023.
      • Guwahati HC struck down Notification No. 56/2023 (Central Tax).
      • The Telangana HC (though not fully adjudicating the validity) made observations suggesting invalidity of Notification 56/2023.
    • The conflicting views have prompted the Supreme Court to take up the matter in SLP No. 4240/2025 (M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.).
    • On 21 February 2025, the Supreme Court framed the issue as whether a time limit for adjudication under Section 73 for FY 2019-20 could be validly extended by such notifications under Section 168A.

Delhi High Court’s Approach & Order

  1. Deferred Decision on Validity of Notifications
    Given that the Supreme Court is currently hearing the question, the Delhi High Court in this Engineers India Ltd. matter has refused to finally decide on the vires (validity) of the impugned notifications. The Court has held that the petition must await the Supreme Court’s ruling in SLP No. 4240/2025.
  2. Interim Relief: Opportunity to Be Heard
    While deferring on the broader validity, the High Court observed that even if notifications are upheld, many adjudication orders have been passed ex parte (without hearing the petitioner), sometimes because petitioners could not file replies or avail personal hearings. The court’s prima facie view is that, in suitable cases, petitioners should be afforded a chance to place their case before the adjudicating authority or pursue appellate remedies.
  3. Next Listing / Timeline
    The case was listed (for further consideration) on 11 September 2025 (or nearest convenient date).

Legal Implications & Observations

  • Judicial Discipline & Avoidance of Conflicting Judgments
    The Delhi HC’s decision to defer on validity reflects a practice of judicial restraint when a higher court is already seized of the issue, to avoid conflicting conclusions across courts. This approach aligns with what Punjab & Haryana HC has done in similar cases — refraining from pronouncing on the vires of notifications and deferring to Supreme Court.
  • Protection of Natural Justice
    Even as the core constitutional question is postponed, the High Court is not turning a blind eye to procedural injustices (e.g. ex parte orders). The Court’s indication that petitioners should be given opportunity to respond underscores the continuing importance of natural justice (fair hearing) in adjudication proceedings.
  • Scope of Section 168A
    The case sharpens the question: Is the power to extend time under Section 168A subject to strict preconditions (like prior GST Council recommendation)? If the Supreme Court holds that the procedures followed in the impugned notifications were invalid, it could invalidate many past extensions and potentially reopen many closed matters.

Legal Context & Core Challenge

  • Section 73 of the CGST Act pertains to demand for tax, interest etc., where tax has not been paid or short-paid.
  • Section 168A is the provision under which the Central / State governments have issued notifications purporting to extend time‐limits (for adjudication / passing orders etc.). These extensions can only be valid if they comply with the statutory mandate.
  • The Petitioner’s challenge is that these GST Notifications have been issued in violation of Section 168A: either because they were issued without prior recommendation of the GST Council, or they state that a recommendation was made when it was not lawful/valid.

Judicial Landscape & Why This Case Matters

  • There is a split of opinion among High Courts across India: e.g. some HCs have upheld the validity of Notification 9 (Allahabad HC), some have quashed Notification 56 (Guwahati HC), etc.
  • Because of this, the Supreme Court has been asked to intervene (SLP No. 4240/2025). The outcome of the Supreme Court’s decision bears directly on the viability of the Notifications.

  • In Engineers India Ltd., the Delhi HC has deferred adjudicating the validity of these notifications until the Supreme Court’s decision is available, but is simultaneously considering interim reliefs: for instance, ensuring that if orders were passed without fair hearing, petitioners may still be granted opportunity.

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