Luxmi Jewellers v. Commissioner of DGST & Ors.

1. This hearing has been done through hybrid mode.

2. The present petition has been filed by the Petitioner – Luxmi Jewellers through its proprietor Kanishka Sawhney under Article 226 of the Constitution of India inter alia seeking to declare Notification No. 9/2023- Central Tax dated 31st March, 2023 and Notification No. 56/2023- Central Tax dated 28th December, 2023 ultra vires to the Central Goods and Service Tax Act, 2017 as also Notification No. 9/2023- State Tax dated 22nd June, 2023 and Notification No. 56/2023- State Tax dated 11th July, 2024 ultra vires to the Delhi Goods and Service Tax Act, 2017 (hereinafter collectively ‘impugned notifications’) and consequently seeking to set aside Show Cause Notice dated 20th May, 2024 (hereinafter ‘impugned SCN’) and impugned order dated 28th August, 2024. (hereinafter ‘impugned order’) passed by Respondent No.2- Sales Tax Officer Class II/ AVATO, Ward 63, Zone 6, Delhi in relation to Financial Year 2019-20.

3. 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:

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:

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:

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.”

4. 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.

5. 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’.

6. On facts, the submission of the Petitioner is that the impugned order is cryptic and non-speaking in nature. In view thereof, according to the Petitioner, the impugned order is liable to be set aside.