Delhi High Court Quashes GST Demand Over Denial of Hearing in Rectification Proceedings
Case tied to challenge on validity of GST deadline extension notifications pending before Supreme Court.
The Delhi High Court has quashed a demand order of approximately Rs. 2.38 crore raised by the Sales Tax Officer against a prominent joint venture involving a large infrastructure firm, citing denial of proper hearing during rectification proceedings.
The bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta directed that the rectification application be heard afresh, affirming the right of the petitioner to be given a personal hearing.
The dispute revolves around a show cause notice (SCN) issued by the Department of Trade & Taxes, Government of NCT of Delhi, for the Financial Year 2018–19. The petitioner challenged both the SCN and the consequent order dated April 29, 2024, alleging violations in the assessment procedure.
The petitioner alleged that there was a lack of reconciliation between GSTR-01 and GSTR-09, resulting in a demand of Rs. 55.38 lakh. Ineligible Input Tax Credit (ITC) claimed from defaulting dealers and tax non-payers, leading to an additional demand of ₹61.83 lakh.
The matter also involved a constitutional challenge to two Central GST Notifications—Nos. 9/2023 and 56/2023—whose legality is currently under scrutiny in the Supreme Court in SLP No. 4240/2025. Given the ongoing litigation across multiple High Courts and divergent views, the Delhi High Court refrained from ruling on the validity of these notifications and clarified that its order is without prejudice to the Supreme Court's final judgment.
The Court noted that the rectification application had been dismissed without granting a hearing, despite the relevant GST return (GSTR-01) being already on record. As a result, the Court restored the rectification application and instructed the Authority to issue a fresh notice of hearing.
The Court emphasized that the petitioner must be given a final opportunity to present its case. No adjournments will be granted in the rehearing. All rights and remedies are preserved, pending final disposal.
Case Details
Case Title: LARSEN AND TOUBRO LIMITED AND PASSAVANT ENERGY AND ENVIRONMENT GMBH JV Versus COMMISSIONER OF DELHI GOODS AND SERVICE TAX AND ANR
Case No.: W.P.(C) 12977/2024 & CM APPL. 54095/2024
Date: 3rd July, 2025
Counsel For Petitioner: Rakesh Kumar
Counsel For Respondent: Arun Khatri
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
