Full Text
HIGH COURT OF DELHI
Date of Decision: 08th May, 2025
27898/2025 M/S LOKESH SANITARY STORE .....Petitioner
Through: Mr. Pranay Jain, Adv.
Through: Mr. Sumit K. Batra, Adv. for GNCTD.
Ms. Abha Malhotra, Sr. CGSC for UOI & Ms. Aayushi Thandassery, Adv.
Prathiba M. Singh, (Oral)
JUDGMENT
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner M/s Lokesh Sanitary Store through Proprietor Sh. Lokesh Kumar under Article 226 of the Constitution of India challenging inter alia Notification No. 56/2023-Central Tax dated 28th December, 2023 (hereinafter ‘impugned notification’) ultra vires to the Central Goods and Service Tax Act, 2017 and consequently seeking setting aside of Show Cause Notice dated 11th December, 2023 (hereinafter ‘SCN’) and order dated 25th April, 2024 (hereinafter ‘impugned order’).
3. The impugned notification was 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.’. 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:
have been noticed hereinabove, are the subject matter of the Hon'ble Supreme Court in the aforesaid SLP.
66. Keeping in view the judicial discipline, we refrain from giving our opinion with respect to the vires of Section 168-A of 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.”
4. 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.
5. In the present case, the submission of the Petitioner, on facts, is that the impugned SCN dated 11th December, 2023, from which the impugned order arises, was uploaded on the ‘Additional Notices Tab’; therefore, the same did not come to the knowledge of the Petitioner. The impugned order dated 25th April, 2024 was passed without providing the Petitioner a personal hearing and in the absence of a reply on behalf of the Petitioner.
6. In fact this Court in W.P.(C) 13727/2024 titled ‘Neelgiri Machinery through its Proprietor Mr. Anil Kumar V. Commissioner Delhi Goods And Service Tax And Others’, under similar circumstances where the SCN was uploaded vide ‘Additional Notices Tab’, had remanded the matter in the following terms:
7. He states that possibly, the petitioner did not had the access of the Notices as they were projected on the GST Portal under the tab ‘Additional Notices & Orders’. He submits that the said issue has now been addressed and the ‘Additional Notices & Orders’ tab is placed under the general menu and adjacent to the tab ‘Notices & Orders’.
8. In view of the above, the present petition is allowed and the impugned order is set aside.
9. The respondent is granted another opportunity to reply to the impugned SCN within a period of two weeks from date. The Adjudicating Authority shall consider the same and pass such order, as it deems fit, after affording the petitioner an opportunity to be heard.
10. The present petition is disposed of in the aforesaid terms.
11. All pending applications are also disposed of.”
7. The impugned demand orders dated 23rd April, 2024 and 5th December, 2023 are accordingly set aside. In response to show cause notices dated 04th December, 2023 and 23th September, 2023, the Petitioner shall file its replies within thirty days. The hearing notices shall now not be merely uploaded on the portal but shall also be e-mailed to the Petitioner and upon the hearing notice being received, the Petitioner would appear before the Department and make its submissions. The show cause notices shall be adjudicated in accordance with law.
8. The petitions are disposed of in the above terms. The pending application(s), if any, also stand disposed of.”
7. It is relevant to note that post 16th January 2024, the Department has effected changes in the portal to ensure that the SCNs become visible to parties. Considering the impugned SCN in the present petition is issued on 11th December, 2023, the Court is of the opinion that the Petitioner ought be provided an opportunity to file a reply and be heard on merits.
8. Accordingly, the impugned order deserves to be set aside. The Petitioner is permitted to file a reply on or before 10th July 2025. Upon filing such reply, a personal hearing shall be given to the Petitioner and the notice for the same shall be sent to the Petitioner through the following email address and phone number: Email: prannayajaiin@gmail.com Phone Number: 8527817330; 9560024475
9. However, it is 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.
10. 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 filing of the reply, access to the notices and related documents.
11. The petition is disposed of in these terms. Pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 8, 2025/dj/Ar.