The Delhi High Court quashed a 2019-20 demand because the notice reached the dealer only on 8 Aug 2024, holding that an internally generated notice never integrated with GSTN was not issued in law.

The Delhi High Court has held that a show cause notice (SCN) generated on the department’s internal system but not made available to the taxpayer until after the deadline in Section 73(2) of the CGST Act is time-barred, and that a glitch on the department’s side cannot extend that limit. [Sikka Motors Pvt Ltd. v. Union of India & Anr., 2026-juristway.com-3155-HC(Delhi)-GST]

A Division Bench of Justice Anil Kshetarpal and Justice Bharat Parashar quashed the SCN and the order-in-original dated 23 Aug 2024. Justice Anil Kshetarpal wrote the judgment.

The petitioner, a Hyundai car dealer, faced demands for 2019-20 for ITC from suppliers with retrospectively cancelled registrations, late fee and interest. Notification No. 56/2023-Central Tax extended the outer limit for orders to 31 Aug 2024, so the SCN had to be issued by 31 May 2024. It reached the petitioner on the portal only on 8 Aug 2024.

The Department said the SCN was generated and uploaded on its AIO system on 30 May 2024, but a glitch during migration to the BO portal meant it was re-uploaded on 8 Aug 2024 with a remark. It also relied on the ASMT‑10 and three hearing opportunities.

The Bench rejected this for three reasons. The portal entry showed the notice as “awaiting GSTN confirmation” with no Common Reference Number, so it was never communicated; issuance under Section 73(2) must be read with service under Section 169. The re-issue itself acknowledged that the earlier notice had not taken effect, and only a notification under Section 168A can extend time. And the Department tried no other mode of service, such as post or e-mail, despite knowing of the glitch.

The Bench held that ASMT‑10 and hearings are preliminary steps and no substitute for the SCN. It described the three-month gap in Section 73(2) as a “minimum statutory limitation”, and held that a proceeding begun after the time limit is without jurisdiction and cannot be cured by the taxpayer’s participation.

2026-juristway.com-3155-HC(Delhi)-GST