Full Text
HIGH COURT OF DELHI
Date of Decision: 7th May, 2025
JAI INDUSTRIES THROUGH ITS PROPRIETOR MOHAMMAD
SALMAN .....Petitioner
Through: Mr. M.A. Ansari, Ms. Tabbassum Firdause and Md. Imran Ahmad, Advs. (M:9718503000)
Through: 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 – Jai Industries through its proprietor, Mohammad Salman, under Article 226 of the Constitution of India inter alia seeking to set aside the Show Cause Notice dated 30th May, 2024 (hereinafter ‘impugned SCN’) and the order dated 28th August, 2024 (hereinafter ‘impugned order’) passed by Respondent No.3- Sales Tax Officer Class II/AVATO, Ward-82, Zone-7, Delhi.
3. Additionally, the petition also seeks to declare -
(i) Notification No. 56/2023-Central Tax dated 28th
(ii) Notification No. 56/2023-State Tax dated 11th
4. The impugned notifications were 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.’. 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:
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:
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.
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. On facts, the submission of the Petitioner is that a detailed reply to the impugned SCN disagreeing with the demand raised has been filed by the Petitioner on 25th August, 2024. Yet, the impugned order does not duly consider the same. It is, in fact, submitted that the impugned order, in contradiction to the reply, records that the Petitioner agrees with the demand. Thus, the Petitioner prays for the impugned order to be set aside for violation of the Principles of Natural Justice.
8. Ld. Standing Counsel for the Respondent – GST Department submits that the Petitioner might have appeared for a personal hearing and subsequently agreed with the demand.
9. The Court has perused the records. The relevant portion of the order that records the admission of the Petitioner to the demand is extracted below:
10. The relevant portion of the reply dated 25th August, 2024 that records Petitioner’s disagreement with the demand raised vide the impugned SCN is extracted below: “Conclusion: In light of the above points, we request your good office to withdraw the demand raised for IGST, CGST and SGST amounting to Rs. 1,35,04,718/- (Including Interest and Penalty), We are prepared to provide any additional information or documentation that may assist in resolving this matter favorably.”
11. A perusal of the above extractions reveals that curiously, it is recorded that the taxpayer is stated to have agreed with various demands, however, a perusal of the reply shows the contrary. There appears to have been some miscommunication between the Adjudicating Authority and the Petitioner. Considering the fact that the Petitioner has disagreed with the demand raised in the impugned SCN vide the reply dated 25th August, 2024 and the fact that it has filed the present writ petition alleging the same, this Court is inclined set aside the impugned order and relegate the matter to the concerned Adjudicating Authority for duly considering the Petitioner’s submissions on merit.
12. Ordered accordingly. The Petitioner is allowed to file a (supplementary) reply, if required, by 10th July, 2025. The Adjudicating Authority shall provide the Petitioner a personal hearing, and the notice for the same shall be sent to the following email ID and phone number: Email: ansariadvocate15@gmail.com Phone number: 8865922011
13. Thereafter, let the comprehensive adjudication order be passed by the Adjudicating Authority on merits upon considering the reply and submissions of the Petitioner.
14. 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 access to the notices and related documents.
15. 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’. and this Court in W.P.(C) 9214/2024 titled ‘Engineers India Limited v. Union of India & Ors’.
16. 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 & released on 15th May, 2025)