Delhi HC Quashes GST Order Against Hyundai Dealer After Show-Cause Notice Appeared On Portal 69 Days Past Deadline

The petitioner, a Hyundai car dealer, was alleged to have wrongly availed input tax credit and to owe late fees and interest for FY 2019–20.

Following scrutiny of its returns and preliminary communications, the respondents issued a show-cause notice (SCN), followed by an Order-in-Original (OIO) dated 23 August 2024.

The petitioner challenged both, contending that, under Section 73(2) of the Central Goods and Services Tax Act, 2017, read with Notification No. 56/2023-Central Tax, the SCN had to be issued by 31 May 2024.

The respondents asserted that it had been generated on 30 May 2024 but was uploaded to the GST portal only on 8 August 2024 because of a technical glitch.

Section 73(10) of the CGST Act prescribes the outer time limit for passing an order, while Section 73(2) requires the SCN to be issued at least three months before that limit; the Court treated this as a mandatory minimum period.

Notification No. 56/2023-Central Tax extended the order deadline for FY 2019–20 to 31 August 2024, making 31 May 2024 the deadline for issuing the SCN.

Section 169 sets out permissible modes of service, including making a notice available on the common portal, sending it by registered or speed post, and sending it to the registered email address.

Section 61 scrutiny and ASMT-10 communications are preliminary steps and do not replace the SCN required to commence adjudication under Section 73.

Section 168A provides for extension by notification in specified circumstances; the Court noted that no further extension notification had been brought to its attention.

The portal record showed an SCN entry dated 29 May 2024 with the status “awaiting GSTN confirmation” and no Common Reference Number, indicating that it had not been integrated with the common portal or communicated to the petitioner.

The Court held that internal generation or upload, without effective communication through a prescribed mode, did not satisfy the statutory requirement.

The respondents’ re-upload of the notice on 8 August 2024 after the technical glitch also showed that the earlier notice had not become effective; the later remark or asserted generation date could not give it retrospective effect.

The respondents had not attempted service by another mode under Section 169, and the preliminary ASMT-10 process and hearing opportunities could not substitute for a timely SCN or cure the limitation defect.

It allowed the petition and quashed both the SCN and the OIO.