C.H. Robinson Worldwide Freight India Private Limited Vs Additional Commissioner (Delhi High Court)

Delhi High Court heard the case of C.H. Robinson Worldwide Freight India Private Limited vs Additional Commissioner through hybrid mode. The petitioner challenged the Show Cause Notice (SCN) dated 31 May 2024 issued by the Central Goods and Services Tax (CGST) Delhi (South), alleging wrongful availment of Input Tax Credit (ITC) for the Financial Year (FY) 2019–20 and raising a demand of ₹11,85,45,612. Though dated 31 May 2024, the SCN was actually issued on 12 August 2024.The petitioner argued that the SCN was time-barred under Section 73(2) read with Section 73(10) of the CGST Act, 2017. As per these provisions, an order under Section 73(9) must be issued within three years from the due date for filing the annual return for the relevant financial year, and the SCN must be issued at least three months prior to this deadline. Notification No. 56/2023-Central Tax dated 28 December 2023 extended the time limit for issuing such orders for FY 2019–20 up to 31 August 2024. Consequently, the SCN should have been issued by 31 May 2024 at the latest.The petitioner contended that since the notice was issued only on 12 August 2024, it violated the mandatory three-month interval between the issuance of the SCN and the final date for passing an order. The petitioner further asserted that the SCN was dispatched to the wrong address, even though the department had already updated the correct address on 15 May 2024.The respondent, represented by counsel Atul Tripathi, submitted that a technical glitch had prevented the issuance of the DRC-01 form, and the Central Board of Indirect Taxes and Customs (CBIC) had acknowledged this issue in instructions dated 2 August 2024. Therefore, the SCN was reissued on 12 August 2024. The department also produced documents suggesting that the SCN had been dispatched earlier, on 3 June 2024.However, the Court examined Sections 73(2) and 73(10) and relied on its earlier judgment in Tata Play Limited vs Sales Tax Officer Class II/AVATO (W.P.(C) 4781/2025). In that case, it was held that while Section 73(10) sets the three-year limit for passing the adjudication order, Section 73(2) mandates that the SCN must be issued at least three months prior to this limit. The Court clarified that this three-month period ensures that the taxpayer has adequate time to respond and be heard before any adjudication. Thus, the interval between the SCN and the final order must be at least three months, and this requirement is mandatory.Applying this principle, the Court held that the department’s argument of a “technical glitch” did not excuse the delay. Since the SCN was not served within the time prescribed under Section 73(2) read with Section 73(10), and considering it was sent to the wrong address despite prior updates, the SCN dated 28/31 May 2024 (dispatched on 3 June 2024) was deemed time-barred.The Delhi High Court quashed the impugned SCN and any consequential orders. The petition was allowed, and all pending applications were disposed of.