Full Text
HIGH COURT OF DELHI
Date of Decision: 07th May, 2025
DEV ENTERPRISES THROUGH ITS PROPRIETOR RAJESH
KUMAR ROHILA .....Petitioner
Through: Mr. Ujjwal Jain, Advocate.
Through: Mr. KG Gopalakrishnan, Advocate.
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 under Article 226 of the Constitution of India challenging the show cause notice dated 27th May, 2024 (hereinafter, ‘the SCN’) issued by the Department of Trade and Taxes, GNCTD, pertaining to the Financial Year 2019-20, as also the consequent order dated 28th August, 2024 passed by the office of Sales Tax Officer Class II/ AVATO, Delhi (hereinafter, ‘the impugned order’).
3. The petition also challenges the vires of Notification No. 9/2023- Central Tax dated 31st March, 2023 and Notification No. 56/2023-Central Tax dated 28th December, 2023 as also the Notification No. 9/2023-State Tax dated 22nd June, 2023 and Notification No. 56/2023-State Tax dated 11th July, 2024 (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 notification and accordingly, the following order was passed:
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:
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 SCN dated 27th May, 2024, was issued upon them, proposing to create a demand of tax, interest and penalty of Rs. 43,82,768/-. Thereafter, a reply dated 27th June, 2024 was filed by the Petitioner. However, no notice for personal hearing was issued upon the Petitioner.
8. Subsequently, the impugned order dated 28th August, 2024 was passed, confirming the liability of Rs. 43,82,768/-. upon the Petitioner.
9. Heard. This Court has considered the submissions made and has perused the impugned order. Relevant portion of the impugned order is extracted herein below: “Response of the tax payer: The tax payer has 'Not agreed' for the following amount in the SCN. SGST: 63414 CGST: 63414 IGST: 2113310 CESS: 0 The reasons cited by the tax payer for disagreeing/partially disagreeing are:
1. Reasons Mentioned by Tax Payer: SGST:0 CGST:0 IGST:0 CESS:0 Submission: We have made purchase of Rs. 22,40,138 (Inclusive of GST) in FY 2019-20 from the party named Singh Trading Co, Chawla Trader, Perfect Overseas, Satguru Impex, Guru Dev Impex., K S G M Steel Industries, Shri Ganesh Traders, Frontier Electricals. mentioned in the notice, the said credit is available in Table 8A as the supplier has duly filed GSTR-1 in stipulated time. The cancellation must have been done at a later date and we are fully eligible to get credit as per Section 16(2) of CGST Act, 2017. Observations and conclusion of the assessing authority: Not Agreed with Tax Payer Specific reasons entered The reply of the taxpayer has been examined and found that reply is incomplete/not comprehensive and no supporting documents has been attached. Hence, this demand is created.”
10. Upon considering the impugned order, it is seen that the Adjudicating Authority observed that the reply was incomplete and no supporting documents are attached. Accordingly, this Court is of the opinion that the same does not merit any interference of this Court and a challenge, if any, shall be taken up by the Petitioner before the appellate authority in appeal.
11. Accordingly, the Petitioner is granted time till 10th July, 2025, to file an appeal before the appellate authority under Section 107 of the Central Goods and Service Tax Act, 2017.
12. If the appeal is filed by the Petitioner before 10th July, 2025, along with the mandatory pre-deposit, the same shall be adjudicated upon merits and shall not be dismissed on the ground of limitation.
13. It is also made clear that the observations made by this Court in the present petition shall have no bearing upon the decision of the appellate authority.
14. However, it is made clear that the issue in respect of the validity of the impugned notification is left open. Any order passed by the appellate 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.
15. The present petition is disposed of in said terms. Pending applications, if any, stand disposed of.
PRATHIBA M. SINGH (JUDGE)
RAJNEESH KUMAR GUPTA (JUDGE) MAY 7, 2025/nd/ss (corrected and released on 13th May, 2025)