Full Text
HIGH COURT OF DELHI
Date of Decision: 13th May, 2025
28758/2025 KK TRADING CO THROUGH ITS PROPRIETOR SATYA VATI .....Petitioner
Through: Mr. Anurag Rajput, adv. Mr. Sahib Rajput,Mr. Sahil Puri, adv. Mr. Dhruv Bhardwaj
Through: Mr. Vinish Phoghat, CGSPC for UOI
Prathiba M. Singh, J. (Oral)
JUDGMENT
1. This hearing has been done through hybrid mode. CM APPL. No. 28757/2025
2. Allowed, subject to all just exceptions. Application is disposed of. W.P.(C) 6326/2025 and CM APPL. 28758/2025 (Stay)
3. The present petition has been filed by the Petitioner– K.K. Trading Co. under Article 226 of the Constitution of India inter alia challenging the order dated 11th August, 2024 issued by the office of the Sales Tax Officer Class II/AVATO Jurisdiction, Delhi (hereinafter, the ‘Sales Tax Officer’) under Section 73 of the Central Goods and Services Tax Act, 2017 (hereinafter, ‘CGST Act. 2017’).
4. The petition also challenges the vires of Notification No. 56/2023- Central Tax dated 28th December, 2023 as also the Notification NO. 56/2023-State Tax dated 11th July, (hereinafter, ‘impugned notifications’).
5. The validity of the impugned notifications was under consideration before this Court in a batch of petitions with the lead petition being W.P.(C) 16499/2023 titled ‘DJST Traders Pvt. Ltd. vs. Union of India and Ors.’. In the said batch of petitions, on 22nd April, 2025, the parties were heard at length qua the validity of the impugned notifications and accordingly, the following order was passed:
6. The Telangana High Court while not delving into the vires of the assailed notifications, made certain observations in respect of invalidity of Notification No. 56 of 2023 (Central Tax). This judgment of the Telangana High Court is now presently under consideration by 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. The Supreme Court vide order dated 21st February, 2025, passed the following order in the said case:
also pending before the Bombay High Court and the Punjab and Haryana High Court. In the Punjab and Haryana High Court vide order dated 12th March, 2025, all the writ petitions have been disposed of in terms of the interim orders passed therein. The operative portion of the said order reads as under:
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.”
6. 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 in S.L.P. NO. 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.
7. 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.
8. On facts, however, the submission of the Petitioner in the present petition is that the Petitioner was not afforded with an opportunity to file a reply to the Show Cause Notice dated 29th May, 2024 (hereinafter, ‘the SCN’) issued by the Sales Tax Officer and the impugned order was passed without affording the Petitioner with an opportunity to be heard. Hence, the impugned order is a non-speaking order and is liable to be set aside on the said ground.
9. It is the case of the Respondents that on 3rd August, 2024 office of the Sales Tax Officer issued a reminder notice to the Petitioner for reply to the SCN to be furnished. The said notice stated that the reply shall be filed before 8th August, 2024 and a personal hearing will be granted on 9th August, 2024. The reminder notice is extracted hereunder for ready reference: “With reference to the show cause notice referred above, neither you have filed any reply, nor you have appeared on the date mentioned in the notice to explain the reasons for the charges mentioned therein. You are once again requested to furnish the reply by the date mentioned in table below. You may appear before the undersigned for personnel hearing either in person or through authorized representative for representing your case on the date, time and venue, if mentioned in table below. You are also requested to bring documents mentioned in the attached annexure, if any, relating to case on the date of hearing and other information called therein.”
10. Heard. The Court has considered the submissions made. The Court has perused the records. In this petition, as mentioned above, no reply to the said SCN has been filed by the Petitioner. Relevant portion of the impugned order reads as under: “Observations and conclusion of the assessing authority: Adjudicated with SCN amount Specific reasons entered The taxpayer neither replied to the SCN nor he or his attorney/ authorised representative appeared before the assessing authority for personal hearing despite multiple opportunity.”
11. This Court is of the opinion that since the Petitioner has not been afforded an opportunity to be heard and the said SCN, as also the consequent impugned order has been passed without hearing the Petitioner. Further, the impugned order is a non-speaking order.
12. Since there is a challenge to the impugned notifications which is still to be adjudicated by the Supreme Court as well as this Court, this Court is of the opinion that an opportunity ought to be afforded to the Petitioner to contest the matter on merits.
13. Accordingly, the impugned order is set aside. The Petitioner is granted time till 15th July 2025, to file the reply to SCN. Upon filing of the reply, the Adjudicating Authority shall issue to the Petitioner, a notice for personal hearing. The personal hearing notice shall be communicated to the Petitioner on the following mobile no. and e-mail address: Mobile No.: 9953029394 E-mail Address: ADVANURAGRAJPUT07@gmail.com
14. The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and fresh order with respect to the SCN shall be passed accordingly.
15. However, it is again made clear that the issue in respect of the validity of the impugned notification is left open and the order of the Adjudicating 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’ and this Court in W.P.(C) 9214/2024 titled Engineers India Limited v. Union of India & Ors.
16. All the 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 uploading of the reply as also the access to the notices and related documents.
17. The present writ petition is disposed of in above terms. All the pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 13, 2025/SV/rks