Delhi High Court sets aside GST Order-in-Original due to missed hearing opportunity and directs fresh decision

The Delhi High Court, in Chemistry Design Pvt Ltd Vs Assistant Commissioner CECGST & Anr, examined the validity of a Section 73 proceeding under the CGST Act, 2017 where the assessee had not responded to a show-cause notice (SCN) served through email and portal but later approached the Court citing a prior amalgamation and a “no due certificate”. The Court ultimately quashed the Order-in-Original and allowed a fresh adjudication, subject to the assessee depositing the entire amount raised in the impugned order and filing its reply along with written submissions.

Since this is a judicial order, what follows is a restructured and rephrased summary of the key facts, arguments, and directions issued by the Delhi High Court.

Background and factual matrix

Issue of show-cause notice and ex parte adjudication

• An SCN dated 26 June 2025 was issued to the assessee under Section 73 of the CGST Act, 2017.
• As per the record, the SCN was:
  • Sent to the assessee by email; and
  • Uploaded on the GST portal as well.
• The assessee did not notice the SCN and, accordingly, did not file any reply or appear for personal hearing.
• Consequent to this non-response, the adjudicating authority passed an Order-in-Original in December 2025 (undated, but passed in that month), fastening liability on the assessee.
• This Order-in-Original became the subject of challenge before the Delhi High Court through the writ petition.

Amalgamation and “no due certificate”

• The assessee contended that an amalgamation scheme had been sanctioned by the NCLT in respect of the erstwhile entity.
• Pursuant to that scheme, a “no due certificate” had allegedly been issued in favour of the amalgamating company.
• As a result of the amalgamation and consequent steps:
  • The GST registration of the erstwhile company stood cancelled; and
  • According to the assessee, there were no outstanding tax dues left against that entity.

Grounds urged by the assessee

The key plea taken by the assessee in the writ proceedings was as follows:

1. Effect of no due certificate and cancellation of registration

   • Once a “no due certificate” had been issued post-amalgamation, there could be no surviving liability under the GST law for the period or transactions covered by that certificate.
   • Consequently, any subsequent SCN and the resulting Order-in-Original could not lawfully fasten a fresh tax liability on the assessee.

2. Challenge to continuation of proceedings

   • In view of the cancellation of registration and the issuance of the no due certificate, it was argued that the very continuation or initiation of proceedings under Section 73 was questionable.
   • The assessee thus contested whether the department was justified in pursuing the SCN and passing the Order-in-Original in such circumstances.

3. Opportunity of hearing

   • The assessee highlighted that it had not noticed the SCN on the portal or via email and hence did not get a real opportunity to place its case on record before the adjudicating authority.
   • On approaching the Court, the assessee expressed willingness to comply with certain conditions to enable a fresh examination of the matter.

Stand of the GST department