The Delhi High Court has set aside a Goods and Services Tax (GST) Show Cause Notice (SCN) issued to Varian Medical Systems International India Pvt. Ltd., holding that the tax authorities acted in violation of principles of natural justice by issuing the SCN even before the expiry of the time granted to respond to the pre-show cause notice (pre-SCN).
The bench of Justice Prathiba M. Singh and Justice Shail Jain ruled that the assessee must be allowed the opportunity to file its full reply and directed the authorities to reconsider the matter afresh.
The petitions arose from an audit initiated by the GST Department covering the period from FY 2017-18 to FY 2022-23. Multiple notices were issued, and information and clarifications were furnished by the company over the course of the audit proceedings. A draft audit report was followed by clarifications, culminating in a pre-SCN issued on November 25, 2024.
However, the SCN was issued just two days later on November 27, 2024, although the company had been expressly allowed time to submit its reply until November 28, 2024. The Court held that such action undermined the fundamental requirement of providing a reasonable and meaningful opportunity for response.
“The authority issued the Show Cause Notice one day before the expiry of the time given in the pre-SCN for filing submissions. This is in complete violation of the principles of natural justice,” the Court observed.
The company also argued that the final audit report dated February 13, 2025, was issued beyond the statutory time limits prescribed under Section 65 of the CGST Act. However, the Court rejected this contention, noting that the audit had been completed within the permissible three-month period from the date the final records were furnished and that the law allowed an extension of up to six months if required.
Therefore, the challenge to the audit report on grounds of limitation was dismissed.
The High Court has now directed the company to file any additional reply to the pre-SCN on or before November 10, 2025. The GST authorities must then evaluate the reply and decide whether a fresh SCN is warranted. In case a new SCN is issued, all further proceedings must be carried out strictly in accordance with law.
The Court clarified that the period during which these writ petitions were pending shall be excluded while computing limitations for both parties.
Case Details
Case Title: Varian Medical Systems International India Pvt. Ltd. Versus Union Of India & Ors.
Case No.: W.P.(C) 1064/2025 & CM APPL. 5273/2025
Date: 28th October, 2025
Counsel For Petitioner: Gajendra Maheshwari
Counsel For Respondent: R. Ramachandran
