Full Text
HIGH COURT OF DELHI
Date of Decision: 7th May, 2025
TOSHNIWAL ELECTRICALS PVT LTD THROUGH ITS DIRECTOR MUKUND MAHESHWARI .....Petitioner
Through: Mr. A.K. Babbar, Advocate.
ORS. .....Respondents
Through: Mr. Anurag Ojha, SSC
Mr. Subhash Tanwar, CGSC
Mr. KG Gopalakrishnan, Advocate for DGST/GNCTD.
Prathiba M. Singh, J. (Oral)
JUDGMENT
1. This hearing has been done through hybrid mode.
2. The present petition has been filed on behalf of the Petitioner under Articles 226 and 227 of the Constitution of India inter alia, challenging the following:
(i) The impugned order of assessment dated 16th August, 2024
(ii) The impugned Show Cause Notice dated 15th
3. The petition also challenges the vires of the following Notifications:
(i) Notification No. 56/2023-Central Tax dated 28th December,
2023;
(ii) Notification No.56 of 2023- State Tax dated 11th July, 2024;
(iii) Notification No. 9/2023-Central Tax dated 31st
(iv) Notification No. 9/2023-State Tax dated 22nd June, 2023.
4. The validity of the impugned notifications 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 notifications and accordingly, the following order was passed:
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:
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:
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.
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. However, on facts, the submission of the Petitioner is that SCN is unsigned and the impugned order is cryptic and non-speaking in nature. It is also submitted that a detailed reply dated 16th July, 2024 to the SCN was filed by the Petitioner, which was not duly considered either.
8. Heard. The Court has perused the reply dated 16th July, 2024 filed by the Petitioner to the SCN, which shows that the only ground raised in the SCN against the Petitioner is of cancellation of GST registration of certain suppliers.
9. In addition, it is also noticed that personal hearing was afforded, however, the Petitioner did not appear on the fixed date. Further, in the final order which has been passed, one of the grounds is that payments were not made by the taxpayer within 180 days from the date of supply of goods.
10. After having considered the reply and all the documents attached therein, the Court is of the opinion that the matter deserves to be re-examined by the Adjudicating Authority. Accordingly, the impugned order is set aside and the matter is relegated back to the concerned Adjudicating Authority which shall provide a personal hearing to the Petitioner on the following email ID: Email: akbabbar@gmail.com
11. The reply dated 16th July, 2024 filed by the Petitioner to the SCN, along with the submissions made in the personal hearing shall be duly considered by the Adjudicating Authority and thereafter, the Adjudicating Authority shall pass a comprehensive order on merits in accordance with law.
12. However, it is made clear that the issue in respect of the validity of the impugned notifications 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 and of this Court in W.P.(C) 9214/2024 titled Engineers India Limited v. Union of India &Ors.
13. The petition is disposed of in the above terms. All pending application(s), if any, are also disposed of.
PRATHIBA M. SINGH, JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 7, 2025 v/rks (corrected & released on 15th May, 2025)