GST Demand Order Set Aside for Violation of Natural Justice; Matter Remanded with Costs — Delhi High Court

by

The Delhi High Court, in Concept Eateries Private Limited v. Union of India & Ors. ( W.P.(C) No. 17072/2025) reiterated the fundamental requirement of granting a proper and effective opportunity of personal hearing before passing an adjudication order under the GST law. The Court held that a demand order passed without such opportunity violates the principles of natural justice and cannot be sustained. Following its earlier decision in Sugandha Enterprises v. Commissioner of DGST, the High Court set aside the impugned order and remanded the matter for fresh adjudication, subject to payment of ₹20,000 as costs by the petitioner.

Facts of the Case

  • A show cause notice (SCN) was issued to the petitioner under the GST law.
  • The adjudicating authority passed a demand order pursuant to the SCN.
  • The petitioner challenged the order before the High Court on the ground that no proper opportunity of personal hearing was granted before passing the order.

Issue

Whether a GST demand order passed without granting an effective and proper hearing violates principles of natural justice and is liable to be set aside.

Held

  • The Delhi High Court observed that grant of a meaningful opportunity of hearing is a fundamental requirement under GST adjudication.
  • Relying on its earlier ruling in Sugandha Enterprises v. Commissioner of DGST [2025] 179 taxmann.com 399 (Delhi), the Court held that:
    • Passing an order without proper hearing amounts to violation of principles of natural justice.
  • Accordingly, the impugned demand order was set aside.

Directions

  • The matter was remanded to the adjudicating authority for fresh consideration.
  • The petitioner was directed to deposit costs of ₹20,000, as a condition for remand.
  • The authority was directed to pass a fresh order after granting proper opportunity of hearing.

Ratio / Legal Principle

Any GST demand order passed without granting an effective personal hearing is unsustainable in law and must be set aside, even if a show cause notice was issued, subject to remand on appropriate terms.

Please share

Leave a comment