The Delhi High Court has held that where a GST demand order is served only by uploading it on the common portal, the limitation period for filing an appeal cannot be treated as having been triggered in the circumstances considered by the Court.
The Bench of Justice Anil Khetarpal and Justice Shail Jain disposed of the petitions by applying the principles laid down by the Punjab and Haryana High Court in Luxmi Traders v. Union Territory of Chandigarh and Others.
The petitions had initially challenged Notification No. 40/2021-Central Tax dated December 29, 2021, and Notification No. 40/2021-State Tax (Delhi) dated June 9, 2022. The petitioners had contended that the notifications were ultra vires Section 164 of the Central Goods and Services Tax Act, 2017 and the Delhi Goods and Services Tax Act, 2017.
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They had also challenged the respective show cause notices and demand orders issued under Section 73 for FY 2020-21 on the ground that the proceedings were barred by limitation. However, after the Punjab and Haryana High Court’s decision in Luxmi Traders, counsel for the petitioners informed the Delhi High Court that the challenge to the notifications was no longer being pressed and requested that the petitions be disposed of in accordance with the principles laid down in that judgment.
The Delhi High Court reproduced the important conclusions reached by the Punjab and Haryana High Court in Luxmi Traders. The central principle was that service of a show cause notice cannot automatically be treated as sufficient merely because the notice has been uploaded on the common GST portal, unless its receipt is acknowledged or the taxpayer files a response to it.
The Punjab and Haryana High Court had further held that where a show cause notice was uploaded on the portal, no reply was filed, and an ex parte order was subsequently passed, the proceedings could be restored to the stage of issuance of the show cause notice. The taxpayer would then be permitted to submit a reply and the department would have to proceed after providing the required opportunity of hearing.
The same judgment also dealt specifically with appellate limitation. Where an order-in-original had been passed after contest but was served only through uploading on the common portal, the limitation period for filing an appeal would not be triggered, according to the principle reproduced by the Delhi High Court.
The factual position in the Saraswati Printers matter was, however, materially different from a case where the taxpayer had completely failed to respond to the show cause notice.
The Court noted that Saraswati Printers had filed a reply to the show cause notice dated November 27, 2024. By filing the reply, the petitioner had acknowledged the notice and participated in the adjudication proceedings.
Consequently, the Court held that the proceedings could not be restored to the stage of issuance of the show cause notice under paragraph 60(ii) of Luxmi Traders.
However, the Court identified a separate procedural defect concerning the subsequent demand order.
The demand order in Saraswati Printers’ case was dated February 27, 2025 and had been served only by uploading it on the common portal.
In view of the principle laid down in Luxmi Traders, the Delhi High Court held that Saraswati Printers would be entitled to file a statutory appeal against the demand order within four weeks from August 7, 2026, the date of the High Court’s order.
Significantly, the Court directed that if the appeal was filed within that four-week period and the other statutory requirements were complied with, the appeal was to be entertained without raising an objection regarding limitation. The appeal would then have to be decided on its merits.
Thus, although the Court did not annul the demand merely because of the portal-based service, it protected the taxpayer’s right to pursue the statutory appellate remedy without being defeated by limitation.
The companion petition, filed by Fabgar Overseas Private Limited, presented a different factual scenario.
In that case, the show cause notice dated November 20, 2024 had also been served only by uploading it on the common portal. Unlike Saraswati Printers, however, the petitioner had not filed any reply to the notice.
The department subsequently passed an ex parte demand order dated February 21, 2025. The Delhi High Court found that this situation was squarely covered by paragraph 60(ii) of Luxmi Traders.
Accordingly, the Court set aside the demand order and restored the proceedings to the stage of issuance of the show cause notice.
Fabgar Overseas was granted four weeks to file its reply to the November 20, 2024 show cause notice. The adjudicating authority was thereafter directed to provide an opportunity of personal hearing and pass a fresh, reasoned order in accordance with law.
The order is significant because it draws an important distinction between taxpayers who have actually acknowledged and participated in GST adjudication proceedings and those against whom ex parte orders were passed after notices were merely uploaded on the portal.
In Saraswati Printers’ case, the filing of a reply meant that the taxpayer had acknowledged the show cause notice. Therefore, there was no basis to reopen the proceedings from the SCN stage. Nevertheless, because the final demand order was served only through portal uploading, the taxpayer was given an opportunity to pursue an appeal without a limitation objection.
In Fabgar Overseas’ case, there was neither a reply to the SCN nor participation before the ex parte order. Consequently, the Court restored the proceedings to the SCN stage and directed a fresh adjudication after granting an opportunity to respond and be heard.
The Delhi High Court expressly clarified that it was not deciding the validity of Notification No. 40/2021-Central Tax dated December 29, 2021, or Notification No. 40/2021-State Tax (Delhi) dated June 9, 2022.
Since the petitioners had withdrawn their challenge to the notifications, the challenge was dismissed as not pressed. The Court therefore left the question of validity undecided.
Importantly, the Bench also clarified that it had not expressed any opinion on the merits of the underlying tax demands.
The decision reinforces the importance of proper communication and service of GST proceedings, particularly where taxpayers’ statutory rights to respond to notices or pursue appeals are concerned.
The order indicates that mere portal uploading cannot, in every factual situation, be treated as sufficient to defeat a taxpayer’s procedural rights. The consequences depend upon the taxpayer’s conduct and the manner in which the proceedings progressed.
Where the taxpayer actually responds to the SCN, the adjudication process cannot ordinarily be reopened merely by relying upon the portal-service principle. However, where the final order is served only through portal uploading, the taxpayer may still receive protection against a limitation objection in filing an appeal, as happened in Saraswati Printers’ case.
Conversely, where an SCN is only uploaded on the portal, no response is filed, and an ex parte order follows, the proceedings may be restored to the SCN stage, with the taxpayer being given an opportunity to respond and participate in a fresh adjudication.
The Delhi High Court’s August 7, 2026 order provides a nuanced application of the principles laid down in Luxmi Traders. It does not hold that every GST proceeding involving portal-based service is automatically invalid. Instead, the relief depends significantly on whether the taxpayer acknowledged the SCN, participated in the adjudication, and whether the demand order was properly served.
For Saraswati Printers, the Court preserved the right to challenge the demand order by granting four weeks to file an appeal without a limitation objection. For Fabgar Overseas, where the SCN had been uploaded without a response and an ex parte demand order followed, the Court set aside the demand and restored the proceedings to the SCN stage.
The ruling therefore underscores that procedural compliance in GST adjudication remains crucial and that the manner of service can have a direct bearing on a taxpayer’s right to an effective hearing and statutory appellate remedy. The Court, however, deliberately left the substantive validity of the disputed GST notifications and the merits of the tax demands open for determination in appropriate proceedings.
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