Delhi High Court Restores GST Proceedings in Case of Improper Service of Show Cause Notice Under Section 74 of CGST Act, 2017

Background and Overview

A significant procedural ruling has emerged from the Delhi High Court in the matter of Absolute Electrovision Pvt Ltd Vs Additional Commissioner, wherein the Court disposed of a writ petition challenging adjudication proceedings initiated under Section 74 of the Central Goods and Services Tax Act, 2017 for the financial years 2017-18 through 2020-21. The case brings into sharp focus the legal consequences of serving a Show Cause Notice (SCN) exclusively through the GST Common Portal, without any independent confirmation of actual receipt by the assessee.

The ruling reaffirms a growing line of judicial precedent holding that mere uploading of a notice on the Common Portal does not constitute valid service where the assessee neither acknowledges receipt nor files any reply — and that ex parte adjudication orders passed in such circumstances are liable to be set aside, with proceedings restored to the SCN stage.

What the Assessee Sought Before the Court

Absolute Electrovision Pvt Ltd approached the Delhi High Court by way of a writ petition seeking the following reliefs:

"a. Set aside/ quash order dated 28.01.2025 passed by Respondent No. 1 under Section 74 of the CGST Act, 2017 for FY 2017-18 to 2020-21 whereby multiple financial years have been clubbed into a single order and by unwarranted invocation of extended period of limitation for want of jurisdiction.

b. Set aside/ quash the proceedings before the Respondent No. 1 as the Respondent No. 1, without following the due procedure of law and without providing a fair opportunity of personal hearing and without considering the reply filed by the Petitioner, has proceeded in an arbitrary manner;

c. Set aside/ quash the show cause notice dated 27.09.2023 issued under Section 74 of the CGST Act, 2017 by unwarranted invocation of extended period of limitation and without fulfilling the essentials for invocation of Section 74 of the CGST Act, 2017;"

The core grievance, as recorded by the Court, was that the Show Cause Notice was never duly served upon the assessee, thereby stripping it of any meaningful opportunity to contest the proceedings. In addition, the assessee raised the following substantive challenges:

  • The extended period of limitation under Section 74 was wrongly invoked without the requisite legal prerequisites being satisfied.
  • Multiple financial years were clubbed into a single adjudication order, which was alleged to be jurisdictionally flawed.
  • The adjudicating authority proceeded without affording a fair opportunity of personal hearing and without taking on record the reply filed by the assessee.

The counsel for the assessee placed reliance on paragraph 60 of the Division Bench judgment of the Punjab and Haryana High Court in Luxmi Traders v UT of Chandigarh & Ors., (2026) 44 CENTAX 371 (P&H), contending that the present matter was squarely covered by the principles enunciated therein and ought to be disposed of on that basis.

The Delhi High Court reproduced paragraph 60 of the said judgment in its entirety, which reads as follows: