Full Text
HIGH COURT OF DELHI
Date of Decision: 07th May, 2025
AKASH GUPTA (TRADE NAME) YOGI SANITATIONS .....Petitioners
Through: Mr. Wahaj Ahmad Khan and Mr. Monis Khan, Advocates.
Through: Mr. Abhinav Sharma, Ms. Avsi Malik and Ms. Aakriti Jain, Advocates.
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 1st December, 2023 (hereinafter, ‘the SCN’) issued by the Sales Tax Officer Class II/ AVATO, New Delhi, pertaining to the financial year 2018-19 as also the consequent order dated 27th April, 2024 passed by the office of Sales Tax Officer Class II/ AVATO, Delhi (hereinafter, ‘the impugned order’). Further, the petition also challenges the order of rejection of rectification dated 18th July, 2024, passed by the office of Sales Tax Officer Class II/ AVATO, Delhi.
3. The petition also challenges the vires of Notification No. 09/2023- Central Tax dated 31st March, 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:
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:
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 exparte. 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. In the present case, the submission of the Petitioner on facts is that upon issuance of the SCN dated 1st December, 2023, a reply was filed on their behalf dated 31st December, 2023. Upon filing of the reply, a notice for personal hearing dated 8th March, 2024 was issued to the Petitioner, fixing a date for personal hearing i.e., 28th March, 2024. However, the same was not attended by the Petitioner.
7. Subsequently, the impugned order dated 27th April, 2024 was passed, raising a demand of Rs. 15,47,274/- upon the Petitioner.
8. It is the case of the Petitioner that after passing of the impugned order, a rectification application dated 1st June, 2024 was filed by them, stating that the impugned order has been passed without considering the reply filed by the Petitioner. However, the said application for rectification was also rejected vide order dated 18th July, 2024. Hence, the Petitioner has approached this Court, stating that since the reply filed by the Petitioner has not been considered by the adjudicating authority while passing the impugned order, it deserves to be set aside.
9. The Court has heard the submissions made. The reply dated 31st December, 2023, filed by the Petitioner upon the issuance of SCN states as under:
10. Further, this Court has perused the impugned order dated 27th April, 2024 as well. The relevant portion of the same reads as under: Observations and conclusion of the assessing authority: Not Agreed with Tax Payer Specific reasons entered reply furnished by the taxpayer found not satisfactory no relevant document has been uploaded/submitted
11. The short issue that has been raised by the Petitioner in this case is that there was a mistake in the filing of Form GSTR-9 due to a clerical error, which led to the issuance of the SCN and the consequent impugned order. The said issue has also been raised by the Petitioner in the reply dated 31st December,
2023.
12. In light of the above stated facts and circumstances, this Court is of the opinion that since the reply filed by the Petitioner has not been considered while passing the impugned order, an opportunity ought to be afforded to the Petitioner to contest the matter on merits.
13. Accordingly, the impugned order is set aside. The Petitioner is granted time till 10th July 2025, to file a fresh reply to SCN along with supporting documents. 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: Mobile No.:9818509340 Email Address: wakhan.bol@gmail.com
14. 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.
15. 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 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.
16. 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.
17. 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/nd/ss (corrected and released on 13th May, 2025)