Full Text
HIGH COURT OF DELHI
Date of Decision: 7th May, 2025
ABDUL GAFFAR(PROP.M/ S FARHAD TRADERS) .....Petitioner
Through: Mr. Nitin Gulati & Ms. Reena Gandhi, Advs.
Through: Mr. K.G. Gopalakrishnan, Mr. Sumit K. Batra and Ms. Nisha Mohandas, Advs.
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 – Abdul Gaffar (Prop. Ms. Farhad Traders) under Article 226 of the Constitution of India, inter alia, challenging the Show Cause Notice dated 28th May, 2024 (hereinafter, ‘SCN’) issued by Office of Sales Tax Officer Class II/ AVATO, as also the consequent demand order dated 17th August, 2024 (hereinafter, ‘impugned order’) passed by Respondent No.2 - Sales Tax Officer Class II/AVATO, Ward 41, Zone 3, Delhi.
3. The petition also challenges the vires of Notification No. 56/2023- Central Tax dated 28th December, 2023 (hereinafter, ‘impugned notification’).
4. The validity of the impugned notification 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 notification and accordingly, the following order was passed:
Notification No.13/2022 dated 5-7-2022 & Notification Nos.[9] and 56 of 2023 dated 31-3-2023 & 8-12-2023 respectively.
2. However, in the present petition, we are concerned with Notification Nos.[9] & 56/2023 dated 31-3-2023 respectively.
3. These Notifications have been issued in the purported exercise of power under Section 168 (A) of the Central Goods and Services Tax Act. 2017 (for short, the "GST Act").
4. We have heard Dr. S. Muralidhar, the learned Senior counsel appearing for the petitioner.
5. The issue that falls for the consideration of this Court is whether the time limit for 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:
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. On facts, however, it is contended by the ld. Counsel for the Petitioner that the SCN was uploaded on the ‘Additional Notices Tab’ on the GST Portal and hence the same was not in the knowledge of the Petitioner.
7. On the other hand, ld. Counsel for the Respondent submits that the SCN was issued after 16th January, 2024, subsequent to which the Respondent had rectified the portal and ensured that the notices uploaded thereon were made visible.
8. The Court has heard the parties. 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 on ‘Additional Notices Tab’ had remanded the matter in the following terms:
17867/2024; DHC) where the Court under similar circumstances has remanded back the matter to ensure the Noticee/Petitioners get a fair opportunity to be heard. The order of the Court in Sathish Chand Mittal (Supra) reads as under:
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 emailed 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.”
9. There is no doubt that after 16th January 2024, changes have been made to the portal and the Additional Notices Tab has been made visible. However, in the present case, the writ petition was filed in 2024 raising issues as to the validity of the impugned Notifications. Under such circumstances, considering the fact that the Petitioner did not get a proper opportunity to be heard and no reply to the SCN has been filed by the Petitioner the matter deserves to be remanded back to the concerned Adjudicating Authority.
10. Accordingly, 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 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.: 9313133000 E-mail Address: Nit.gulati@yahoo.com
11. The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing shall be duly considered by the Adjudicating Authority and a fresh order with respect to the SCN shall be passed accordingly.
12. 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.
13. 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.
14. 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 Rahul/ck