Mandatory Three-Month Notice Period under Section 73(2) Reaffirmed by Delhi High Court in GST Proceedings

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Case Summary :
No.- W. P. (C) 4781/2025 & CM APPL. 22012/2025
In a significant judgment, the Delhi High Court has quashed a Show Cause Notice (SCN) issued to C.H. Robinson Worldwide Freight India Pvt. Ltd. for the Financial Year 2019–20. The SCN dated 31st May 2024 was served on 12th August 2024, i.e., beyond the prescribed time limit, and hence was held to be barred by limitation under Section 73(2) of the Central Goods and Services Tax Act, 2017.

Issues :

Whether the impugned Show Cause Notice (SCN) was issued within the period of limitation prescribed under Section 73 of the Central Goods and Service Tax Act, 2017 (CGST Act)?Whether adequate opportunity, including personal hearing, was afforded to the petitioner in compliance with the principles of natural justice and the provisions of the CGST Act’ Whether the writ petition is maintainable in view of the availability of statutory remedies under the CGST Act?

Court’s Key Findings:

  1. Mandatory Three-Month Period:
    The Court reaffirmed that under Section 73(2), a minimum period of three months prior to the passing of the adjudication order must be provided for the assessee to submit a reply to the notice.
    • The extended deadline for passing the final order for FY 2019–20 was 31st August 2024.
    • Therefore, the SCN ought to have been served by 31st May 2024.
  2. Invalid Service and Technical Glitch Argument:
    • The Revenue contended that a “technical glitch” on the GST portal delayed the issuance of Form DRC-01 and that the notice had been physically dispatched earlier.
    • The Court, however, held that technical glitches or administrative difficulties cannot override a mandatory statutory timeline.
    • Service at an outdated address further rendered the notice defective.
  3. Reliance on Precedent:
    The Bench (Justices Prathiba M. Singh and Shail Jain) relied on its earlier ruling in Tata Play Ltd. v. Union of India (2024), reiterating that the three-month period under Section 73(2) is mandatory, not directory.
  4. Outcome:
    The High Court quashed the SCN dated 31st May 2024 and all consequential proceedings, holding that the notice violated the limitation prescribed by law.

Statutory Reference:

  • Section 73(2) of the Central Goods and Services Tax Act, 2017 mandates that: “The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub-section (10) for issuance of the order.”
  • Section 73(10) prescribes the overall limitation for passing the adjudication order, generally within three years from the due date for furnishing the annual return, subject to notified extensions.

Legal Insight:
The ruling reiterates that timely service of notice is a jurisdictional requirement. A notice not served within the mandatory period under Section 73(2) is void ab initio, irrespective of any departmental justification.
This strengthens taxpayer protection against delayed proceedings and reinforces the principle that statutory timelines under the CGST Act are mandatory and cannot be relaxed by internal administrative instructions.

The Delhi High Court’s decision fortifies the procedural safeguards under the CGST Act, emphasizing strict adherence to limitation periods. It sends a clear message that statutory compliance cannot be overridden by administrative lapses.