Full Text
HIGH COURT OF DELHI
Date of Decision: 07th May, 2025
GOVIND AGGARWALPROP VISHAL CHEM INDIA .....Petitioner
Through: Mr. Ruchir Bhatia and Mr. Abhishek Anand, Advs.
Through: Mr. Atul Krishna, SPC, UOI.
Ms. Vaishali Gupta, Adv. for GNCTD.
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 –Mr. Govind Aggarwal, Proprietor- Vishal Chem (India) under Article 226 of the Constitution of India inter alia seeking to declare Notification No. 56/2023- Central Tax dated 28th December, 2023 ultra vires to the Central Goods and Service Tax Act, 2017 (hereinafter ‘impugned notification’) and consequently seeking setting aside of Show Cause Notice dated 17th May, 2024 (hereinafter ‘impugned SCN’) and demand order dated 24th August, 2024 (hereinafter ‘impugned order’).
3. At the outset the ld. Counsel for the Petitioner submits on instructions, that he does not wish to press prayer (b) and (d) which read as under: “(b) Issue a writ of declaration or any other writ, order or direction in the nature thereof declaring Section 16(2)(c) of the CGST Act, 2017/DGST Act, 2017 as ultra vires to the Constitution of India, 1950; ******
(d) Issue an appropriate writ, order or direction to declare the orders dated 09.08.2024, 16.11.2023, 07.11.2023, 16.10.2023 and 29.09.2023 issued by the Department of Trade and Taxes, Government of National Capital Territory of Delhi, as ultra vires being beyond the provisions of the parent Act. i.e., Delhi Goods and Service Tax Act, 2017.”
4. The impugned notification was under consideration before this Court in a batch of matters with the lead matter being W.P.(C) 16499/2023 titled ‘DJST Traders Pvt. Ltd. vs. Union of India and Ors.’. On 22rd April, 2025, the parties were heard at length qua the validity of the impugned notifications and accordingly, the following order was passed:
the expiry of the limitation in terms of the Notification No.13 of 2022 (State Tax).
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:
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:
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, the submission of the Petitioner is that the impugned order is a cryptic and completely non-speaking order. However, upon a perusal, it can be seen that the impugned order is a detailed order, duly considering the Petitioner’s reply dated 13th June, 2024. It is also noticed that the Respondent- GST Department has, in fact, dropped certain demands, upon considering the Petitioner’s submissions. The relevant portion of the impugned order is set out below:
7. Considering the above position, this Court is of the view that the impugned order does not deserve to be interfered with under writ jurisdiction.
8. However, considering the fact that the impugned order is an appealable order under Section 107 of Central/Delhi Goods and Service Tax Act, 2017, the Petitioner is permitted to avail its appellate remedy. In view of the present petition being pending before this Court, the appeal, if filed by 10th July, 2025 along with the prescribed pre-deposit, shall not be dismissed by the Appellate Authority on the grounds of limitation and shall be heard on merits.
9. 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 enable filing of appeal, as also access to the notices and related documents.
10. However, it is again made clear that the issue in respect of the validity of the impugned notification is left open and the order of 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’.
11. The petition is disposed of in these terms. Pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 7, 2025 dj/Ar. (corrected and released on 15th May, 2025)