Full Text
HIGH COURT OF DELHI
Date of Decision: 07th May, 2025
M/S KRISHNA ENTERPRISES THROUGH ITS PROPRIETOR
DEEPAK BANSAL .....Petitioner
Through: Mr. M.A.Ansari, Ms. Tabassum Firdause & Mr. Arvind Soni, Advs.
(Mob: 9718503000) ansariadvocate15@gmail.com
ORS. .....Respondents
Through: Mr. K.G. Gopalakrishnan, Mr. Sumit K. Batra & Mr. Parth Sharma, Advs.
Mrs. Anju Tyagi, SPC
9810362808)
Mr. Anurag Ojha, SSC
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 – M/S Krishna Enterprises Through its Proprietor Deepak Bansal under Article 226 of the Constitution of India inter alia challenging the Show Cause Notice dated 19th December, 2023 (hereinafter, the ‘Show Cause Notice ’) issued by the Sales Tax Officer Class II/ AVATO, Delhi (hereinafter, the ‘Sales Tax Officer’) as also the consequent order dated 24th April, 2024 issued by the Sales Tax Officer.
3. Further, vide the present petition, the Petitioner 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, 2024 (hereinafter, the ‘impugned notifications’).
4. 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:
5. In fact, Notification Nos. 09 and 56 of 2023 (Central Tax) were challenged before various other High Courts. The Allahabad Court has upheld the validity of Notification no.9. The Patna High Court has upheld the validity of Notification no.56. Whereas, the Guwahati High Court has quashed Notification No. 56 of 2023 (Central Tax).
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:
adjudication of show cause notice and passing order under Section 73 of the GST Act and SGST Act (Telangana GST Act) for financial year 2019-2020 could have been extended by issuing the Notifications in question under Section 168- A of the GST Act.
6. There are many other issues also arising for consideration in this matter.
7. Dr. Muralidhar pointed out that there is a cleavage of opinion amongst different High Courts of the country. 8. Issue notice on the SLP as also on the prayer for interim relief, returnable on 7-3-2025.”
7. In the meantime, the challenges were 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:
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 in S.L.P. NO. 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.
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. In the present case however, on facts, the submission of the Petitioner is that the Show Cause Notice as also the impugned order are not signed by the concerned authority and hence, the same are not valid. Further, an opportunity to file a reply has not been granted to the Petitioner.
8. It is further submitted on behalf of the Petitioner that if an opportunity is given, the Petitioner will file the reply. Accordingly, the matter may be adjudicated afresh.
9. Considering the fact that the Petitioner was not granted a proper opportunity to be heard, in the opinion of the Court, the matter deserves to be remanded back to the concerned Adjudicating Authority.
10. A personal hearing shall be granted to the Petitioner and the notice for the same shall be sent on the following email address: ● ansariadvocate15@gmail.com
11. However, it is again made clear that the issue in respect of validity of the impugned notifications is left open and the order of the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court and this Court.
12. Petition is disposed of in these terms. All pending applications are also disposed of.
13. 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 file a reply as also enable access to the notices and related documents.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 7, 2025 kk/rks (corrected & released on 13th May, 2025)