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HIGH COURT OF DELHI
Date of Decision: 15th May, 2025
KRISHNA TRADERS .....Petitioner
Through: Mr.M.A. Ansari and Ms.Tabbassum Firdause, Advocates.
ORS. .....Respondents
Through: Mr. Harpreet Singh, Senior Standing Counsel
Mr. Jai Ahuja, Advocates Mr. Awadhesh Kumar Singh, Advocate for R-4/UOI
Prathiba M. Singh, J. (Oral)
JUDGMENT
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner under Article 226 of the Constitution of India, inter alia, challenging the following -
(i) summary of Show Cause Notice in form DRC-01 dated 15th
(ii) the summary order dated 29th April, 2024 (hereinafter, ‘the impugned order’) passed by the Sales Tax Officer Class II/AVATO, Ward 32, Zone 1, Delhi (hereinafter ‘Respondent-Department’) under Section 73 of the Delhi/Central Goods and Services Tax Act, 2017 vide which a demand to the tune of Rs. 1,53,66,782/- has been confirmed.
3. This petition also challenges Notification Nos.56/2023-State Tax dated 11th July, 2024 and Notification Nos.56/2023-Central Tax dated 28th December, 2023 (hereinafter ‘impugned notifications’);
4. The impugned notifications were under consideration before this Court in a batch of matters with the lead matter being W.P.(C) 16499/2023 titled ‘DJST Traders Pvt. Ltd. vs. Union of India and Ors.’. On the last date of hearing i.e., 22rd April, 2025, the parties were heard at length qua the validity of the impugned notifications and accordingly, the following order was passed:
Commissioner of State Tax & Ors. The Supreme Court vide order dated 21st February, 2025, passed the following order in the said case:
the Act as well as the notifications issued in purported exercise of power under Section 168-A of the Act which have been challenged, and we direct that all these present connected cases shall be governed by the judgment passed by the Hon'ble Supreme Court and the decision thereto shall be binding on these cases too.
67. Since the matter is pending before the Hon'ble Supreme Court, the interim order passed in the present cases, would continue to operate and would be governed by the final adjudication by the Supreme Court on the issues in the aforesaid SLP-4240-2025.
68. In view of the aforesaid, all these connected cases are disposed of accordingly along with pending applications, if any.”
8. The Court has heard ld. Counsels for the parties for a substantial period today. A perusal of the above would show that various High Courts have taken a view and the matter is squarely now pending before the Supreme Court.
9. Apart from the challenge to the notifications itself, various counsels submit that even if the same are upheld, they would still pray for relief for the parties as the Petitioners have been unable to file replies due to several reasons and were unable to avail of personal hearings in most cases. In effect therefore in most cases the adjudication orders are passed ex-parte. Huge demands have been raised and even penalties have been imposed.
10. Broadly, there are six categories of cases which are pending before this Court. While the issue concerning the validity of the impugned notifications is presently under consideration before the Supreme Court, this Court is of the prima facie view that, depending upon the categories of petitions, orders can be passed affording an opportunity to the Petitioners to place their stand before the adjudicating authority. In some cases, proceedings including appellate remedies may be permitted to be pursued by the Petitioners, without delving into the question of the validity of the said notifications at this stage.
11. The said categories and proposed reliefs have been broadly put to the parties today. They may seek instructions and revert by tomorrow i.e., 23rd April, 2025.”
5. Thereafter, on 23rd April, 2025, this Court, having noted that the validity of the impugned notifications is under consideration before the Supreme Court, had disposed of several matters in the said batch of petitions after addressing other factual issues raised in the respective petitions. Additionally, while disposing of the said petitions, this Court clearly observed that the validity of the impugned notifications therein shall be subject to the outcome of the proceedings before the Supreme Court.
6. However, in cases where the challenge is to the parallel State Notifications, the same have been retained for consideration by this Court. The lead matter in the said batch is W.P.(C) 9214/2024 titled ‘Engineers India Limited v. Union of India & Ors’.
7. On facts, the submission of the Petitioner is that the impugned Show Cause Notice (SCN) dated 15th December, 2023 has been issued on the grounds that Input Tax Credit (ITC) was claimed on the basis of transactions with (i) dealers whose GST registrations have been cancelled, and (ii) dealers who are alleged defaulters in filing returns and non-payment of tax. It is submitted that the Petitioner filed a detailed reply to the SCN on 15th January,
2024. However, the impugned order has been passed without due consideration of the said reply.
8. Heard the parties. The Court has also perused the records. It is noticed that the reply has been filed and even the Personal hearing has also been granted in this matter and the proprietor of the Petitioner has appeared before the Adjudicating Authority. The impugned order has also given clear reasons as to why the order is being passed and in the opinion of the Court, has duly considered the reply. The relevant portion of the impugned order is extracted below:
9. In view of the above circumstances, and considering the fact the impugned order is appealable under Section 107 of the Central Goods and Services Tax Act, 2017, this Court is of the opinion that the impugned order does not warrant interference under the writ jurisdiction.
10. However, considering the fact that the challenge to the validity of the impugned notifications are still pending before the Supreme Court, the Petitioner is permitted to file an appeal before the concerned Appellate Authority by 15th July, 2025. If the appeal is filed by 15th July, 2025 along with the prescribed pre-deposit the appeal shall not be disposed on the grounds of limitation, and shall be heard on merits.
11. All rights and remedies of the parties are left open. Access to the GST portal, if not already available, shall be ensured to be provided to the Petitioner to enable access to notices and related documents.
12. However, it is made clear that the issue in respect of the validity of impugned notifications is left open and the order of the Appellate Authority shall be subject to the outcome of the decision of the Supreme Court in S.L.P No 4240/2025 titled ‘M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors’ as also of this Court in W.P.(C) 9214/2024 titled ‘Engineers India Limited v. Union of India & Ors’.
13. The petition is disposed of in these terms. All pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 15, 2025