Full Text
HIGH COURT OF DELHI
Date of Decision: 7th May, 2025
M/S GRILLED ROTI .....Petitioner
Through: Mr. Vijay Gupta & Mr. Rahul Gupta, Advs. (M: 9711953429)
Through: Ms. Vaishali Gupta, Adv.
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 Grilled Roti through its proprietor Mr. Atul Jain under Article 226 of the Constitution of India challenging the show cause notice dated 25th September, 2023 (hereinafter, ‘the SCN’) issued by the Department of Trade and Taxes, GNCTD, pertaining to the Financial Year 2017-18, as also the consequent order dated 22nd December, 2023 passed by the office of Sales Tax Officer Class II/ AVATO (hereinafter, ‘the impugned order’).
3. The petition also challenges the vires of Notification No. 9/2023- Central Tax dated 31st March, 2023 as also the Notification No. 9/2023- State Tax dated 22nd June, 2023 (hereinafter ‘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:
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:
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:
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, the submission of the Petitioner, on facts, is that a demand is sought to be raised upon the Petitioner vide SCN dated 25th September, 2023 after suspension of the GST registration of the Petitioner which was carried out through order of cancellation of registration dated 23rd December, 2021 and was given retrospective effect from 1st July, 2017.
8. It is the case of the Petitioner that since their GST Registration stood cancelled, they did not have any access to the GST portal or to the forms etc. which were relied upon in the SCN. Upon receiving the knowledge of the SCN, the Petitioner also filed a reply dated 28th October, 2023, explaining their above stated position.
9. Further, an application dated 30th October, 2023 was also filed on behalf of the Petitioner seeking copies of all the documents. The impugned order, on the one hand records that no reply has been filed and in the same very order the Officer also observes that the reply is not satisfactory. The said order reads as under: “Whereas, SCN/ DRC-1 [see rule 100(2) & 142(1)(a)] was issued to the taxpayer under Section 73 of CGST / DGST Act & Rules, 2017; And whereas, it is noticed that the Taxpayer has not replied to the show cause notice points and no evidence is produced against DRC-01.Further the taxpayer has requested to provide GSTR-1,GSTR-3B and GSTR- 2A. The same request has been forwarded to EDP Branch. Further the reply filed by the taxpayer is not satisfactory. And whereas, further as per section 73(7) notice of tax and interest is to be given while section 73(9) prescribed for imposition of penalty equivalent to 10% of tax or Rs. 10000/- whichever is higher. The penalty is consequently and mandatory as per Act. As such the registered person is liable to pay penalty equivalent to 10% of tax along with tax amount in each head already conveyed through SCN/ DRC-01. In view of aforesaid circumstances, the undersigned is left with no other option left but to create demand in accordance with the provisions of CGST / DGST Act & Rules, 2017. The said tax, interest and penalty is required to be deposited within 90 days of issuance of this notice.”
10. Clearly, there has been a miscommunication in this matter as the Petitioner did not have access to the GST portal at the time when the SCN was issued. The Petitioner shall, accordingly, be given access to the portal for a period of at least two months.
11. The impugned order is set aside. The Petitioner is granted time till 10th July 2025, to file the reply to SCN. Upon filing of the reply, the Adjudicating Authority shall issue a notice for personal hearing to the Petitioner. The personal hearing notice shall be communicated to the Petitioner on the following mobile no. and e-mail address: Email address: Rahulgupta219A@gmail.com Mobile No.: 9711953429
12. 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.
13. However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by 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 of this Court in W.P.(C) 9214/2024 titled Engineers India Limited v. Union of India &Ors.
14. All rights and remedies of the parties are left open. Access to the GST Portal, shall be provided to the Petitioner to enable uploading of the reply as also access to the notices and related documents.
15. 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 7, 2025 dj/ss (corrected & released on 13th May, 2025)