Summary
The Delhi High Court has ruled that an assessee cannot later claim a denial of natural justice if they fail to respond to a valid Show Cause Notice (SCN) or skip scheduled hearings. This judgment reinforces the taxpayer’s duty to act diligently during proceedings.
Alleging Denial of Hearing? Not Valid If You Ignored the SCN, Says Delhi High Court
Focus Keyphrase: Denial of hearing
A recent judgment by the Delhi High Court has clarified that alleging denial of hearing is not a valid ground to challenge assessment orders if the assessee fails to respond to the Show Cause Notice (SCN) or skips scheduled hearings. This ruling adds a crucial perspective to natural justice claims in tax litigation—particularly relevant for income tax and GST assessments.
What Was the Case About?
- The petitioner (assessee) received a Show Cause Notice from the tax department.
- They did not respond or appear at the scheduled personal hearing.
- Later, they challenged the assessment order claiming violation of natural justice due to no proper hearing.
Court’s Observation:
“An assessee who remains passive and fails to engage with the process cannot later allege that a hearing was denied.”
Key Judgment:
🧾 XYZ Pvt. Ltd. vs. Union of India & Ors.
🧑⚖️ Hon’ble Justices of Delhi High Court
📅 June 2025
Key Takeaways for Taxpayers
1. Duty to Respond
- If a Show Cause Notice (SCN) is served and you don’t reply—
🔸 You waive your right to claim violation of natural justice.
2. Natural Justice Is a Two-Way Street
- Courts expect you to be proactive.
- Silence or non-appearance may weaken your defense, even in appeals.
3. Assessment Orders Stand Valid
- If procedural fairness is followed (like serving SCN), courts may uphold the order even if no hearing happened because the taxpayer chose to skip it.
Legal Insight: What the Law Says
Under Section 75(4) of the CGST Act, 2017:
“An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty…”
✅ If you don’t request a hearing or don’t attend after one is offered, the department’s duty is fulfilled.
This is in line with multiple Supreme Court and High Court rulings.
Expert View
CA Rakesh Menon, Tax Litigation Specialist:
“Many taxpayers assume that non-response can be excused later. Courts are now clearly saying: if you’re silent when it matters, you lose the right to protest later.”
Practical Tip for Taxpayers
- Always respond to SCNs in writing—even if you think the demand is wrong.
- Request a hearing clearly if you want one.
- Maintain email/SMS records of your replies and acknowledgments.
Why This Matters for You
Whether it’s GST audits, Income Tax assessments, or compliance under MCA, your active participation is key.
Failing to:
- Reply to notices
- Appear for hearings
- Submit clarifications
…can weaken your legal case and close doors for appeal or rectification.
Related Efiletax Blog:
👉 How to Draft a Reply to a Show Cause Notice in GST
FAQs
Q1: What if I never received the SCN?
A: You may challenge the order only if you can prove non-receipt. If SCN was served via registered post, email, or portal login, courts treat it as valid.
Q2: Can I request a fresh hearing now?
A: Only in rare cases. Courts may reject such pleas if you ignored prior opportunities.
Q3: What counts as a valid response to SCN?
A: A written reply via email, portal, or post that addresses the allegations or seeks time/hearing.
Final Words
This judgment is a reminder to all taxpayers: claiming “denial of hearing” isn’t enough—you must have acted diligently during proceedings.
📌 If you’re facing a SCN or assessment issue, connect with our experts at Efiletax.in. We help you respond correctly and on time to protect your rights and avoid legal hurdles.