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* IN THEHIGH COURTOF DELHIAT NEW DELHI
Date of decision: 06th May, 2025
+ W.P.(C) 15156/2024 & CM APPL. 63558/2024
SHIVAM IRON STORE THROUGH PROPRIETOR JAGDISH
BANSAL .....Petitioner
Through: Mr. Prabhat Kumar and Mr. Utkarsh
Kumar, Advs.
Through: Mr Shubham Tyagi, SSC, CBIC and
Ms. Navruti Ojha, Adv. for R-1 & 2.
(M:9650049869)
Mr. K.G. Gopalakrishnan, Mr. Sumit
K. Batra and Ms. Nisha Mohandas, Advs. for GNCTD.
JUSTICE RAJNEESH KUMAR GUPTA
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– Shivam Iron Store under Articles 226 & 227 of the Constitution of India challenging the show cause notice dated 21st May, 2024 (hereinafter, ‘the SCN’) issued by the Department of Trade and Taxes, GNCTD, pertaining to the Financial Year 2019-20, as also the consequent order dated 29th August, 2024 passed by the office of Sales Tax Officer Class II/ AVATO, Delhi (hereinafter, ‘the impugned order’).
3. The petition also challenges the vires of Notification No. 9/2023- Central Tax dated 31st March, 2023 and Notification No. 56/2023- Central Tax dated 28th December, 2023 (hereinafter ‘impugned notifications’).
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:
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. In the present case, the submission of the Petitioner, on facts, is that a reply dated 20th June, 2024 along with supporting documents was filed by the Petitioner pursuant to the SCN dated 21st May, 2024. In the SCN, a demand of Rs. 1,88,68,898/- was raised upon the Petitioner.
7. Thereafter, the impugned order dated 29th August, 2024 was passed wherein the demand raised upon the Petitioner vide the SCN was partially dropped and the remaining demand of Rs. 1,14,96,092/- was confirmed.
8. It is the case of the Petitioner that the impugned order has been passed in haste without duly considering the reply as well as the documents filed by the Petitioner and has mechanically confirmed the demand of the remaining amount. Hence, the impugned order deserves to be set aside.
9. Heard. This Court has considered the submissions made and has perused the impugned order. In the opinion of this Court, the impugned order is detailed in nature and has been passed after duly considering the reply of the Petitioner. Relevant portion of the impugned order is extracted herein below: “Observations and conclusion of the assessing authority: Partially Agreed with Tax Payer Liability ascertained by officer SGST Rs: 2886575 CGST Rs: 2886575 IGST Rs: 0 CESS Rs: 0 Specific reasons entered The reply of the taxpayer has been examined from GST portal and found that the reply of the taxpayer is partially satisfactory. Further, it is submitted that out of 11 cancelled dealer 02 dealers was cancelled due to return defaulters (dropped) and 09 dealer has been cancelled due to Non-existence of firm/Fake invoices issue/payment due/reference received from CGST/Non/High GTO/Non-Compliance/fictious transactions and the taxpayer has submitted incompleted supporting documents. Hence, demand is created.”
10. Upon considering the impugned order, this Court is of the opinion that the same does not merit any interference of this Court and a challenge, if any, shall be taken up by the Petitioner before the appellate authority in appeal.
11. Accordingly, the Petitioner is granted time till 10th July, 2025, to file an appeal before the appellate authority under Section 107 of the Central Goods and Service Tax Act, 2017.
12. If the appeal is filed by the Petitioner before 10th July, 2025, along with the mandatory pre-deposit, the same shall be adjudicated upon merits and shall not be dismissed on the ground of limitation.
13. It is also made clear that the observations made by this Court in the present petition shall have no bearing upon the decision of the appellate authority.
14. 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 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.
15. The present petition is disposed of in said terms. Pending applications, if any, stand disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 6, 2025/dk/ss (corrected & released on 13th May, 2025)