Full Text
HIGH COURT OF DELHI
Date of Decision: 07th May, 2025
VICKY JAIN (PROP. M/S SHREE PLASTICS) .....Petitioner
Through: Mr. Nitin Gulati, Advocate (M-
JUDGMENT
9313133000) Emailnit.gulati@yahoo.com versus UNION OF INDIA & ANR......Respondents Through: Mr. Atul, SPC for UOI. Mr. Abhinav Sharma, Advocate. Mr. KG Gopalakrishnan, Advocate for GNCTD. CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner– Vicky Jain (Prop. M/s Shree Plastics) under Article 226 of the Constitution of India challenging the Show Cause Notice dated 31st May, 2024 (hereinafter, ‘Show Cause Notice’) issued by the Sales Tax Officer Class II/ AVATO, Delhi (hereinafter, ‘Sales Tax Officer’) as also the consequent order dated 30th August, 2024 passed by the office of the Sales Tax Officer.
3. The petition also challenges the vires of Notification No. 56/2023- Central Tax dated 28th December, 2023 (hereinafter, the ‘impugned notification’).
4. The impugned notifications were 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:
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:
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:
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 in S.L.P. No. 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.
6. On facts however, it is the case of the Petitioner that the Show Cause Notice was issued on 31st May, 2024. On receiving the same, the Petitioner submitted two replies to the Show Cause Notice along with supporting documents. First, on 31st May, 2024 and the second, on 19th June, 2024. The Respondents however, without considering the said replies, passed the impugned order.
7. It is further contended that the Petitioner’s Counsel also appeared before the department. However, without granting a hearing, the Respondent-GST Department passed the following order: “Observations and conclusion of the assessing authority: Not Agreed with Tax Payer Specific reasons entered The taxpayer was requested to submit documents in support of meeting the conditions of Section 16(2)(b) and provision to Sec 16(2) of the GST Act 2017 i.e. document regarding payment of freight charges to the transporter, weigh bridge slips and partywise payment ledger, bank statement etc. Further no documents submitted to satisfy condition of Section 16(2)(c) alongwith information in following format in r/o cancelled dealers mentioned in the notice: - Doc. No. Doc. Date Party Name Doc. Value Payment Date Payment Amount Taxable Value Integrated Tax Central Tax State / UT Tax days Interest Despite sufficient & repeated opportunities, even notice u/s 75(4) of CGST / DGST Act & Rules, 2017, the Taxpayer neither filed reply of Notice u/s 75(4) within stipulated period nor appeared for Personal Hearing before Proper Officer on the given date and time, which indicate that the taxpayer has nothing to say in the matter. Therefore, the requisite tax required to be paid alongwith interest & penalty as per section 73(7) wherein 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.”
8. Clearly, there has been an error by the Adjudicating Authority. In view thereof, the matter be remanded back to the Adjudicating Authority for fresh adjudication. Personal hearing be afforded after considering all the documents and a fresh order be passed in accordance with law. The notice for Personal Hearing be issued to the Petitioner on the following email: Email: N.GULATl@YAHOO.COM Mobile: 93131 33000
9. All the rights and remedies of the parties are left open. Access to the GST Portal, if not already available, shall be provided to the Petitioner to enable filing of reply 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 notifications is left open and the order of 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’.
11. The petition is disposed of in the above terms. Pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 07, 2025/da/rks (corrected & released on 15th May, 2025)