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* IN THEHIGH COURTOF DELHIAT NEW DELHI
Date of decision: 06th May, 2025
+ W.P.(C) 14937/2024 & CM APPL. 62651/2024
JM TRADERS THROUGH PROPRIETOR
SHIVAM BANSAL .....Petitioner
Through: Mr. Prabhat Kumar and Mr. Utkarsh
Kumar, Advs. (M:9312315121)
Through: 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– JM Traders under Articles 226 & 227 of the Constitution of India challenging the show cause notice dated 28th May, 2024 (hereinafter, ‘the SCN’) issued by the Additional Commissioner, CGST, Delhi West, pertaining to the Financial Year 2019-20, as also the consequent order dated 28th 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 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:
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 21st June, 2024, along with supporting documents was filed by the Petitioner to the SCN dated 28th May, 2024.
7. However, it is stated that no personal hearing notice was issued to the Petitioner and the impugned order was passed without affording the Petitioner with an opportunity to be heard.
8. It is further submitted that the Goods & Services Tax Identification Number (hereinafter, ‘GSTIN’) Registration of the Petitioner stood retrospectively cancelled from 29th November, 2018 vide an order for cancellation of registration dated 14th March, 2023. Hence, the impugned order is a non-speaking order and is liable to be set aside on the said ground.
9. Heard. The Court has considered the submissions made.
10. A perusal of the impugned order reveals that the date fixed for personal hearing of the Petitioner is 28th August, 2024 which is the same as the date on which the impugned order has been passed. Further, the relevant portion of the impugned order reads as under: “Observations and conclusion of the assessing authority: Not Agreed with Tax Payer Specific reasons entered Despite opportunities for personal hearing including notice under section 75(4) of the CGST/DGST Act and Rules, the taxpayer has not appeared till date. The taxpayer has only submitted online reply and the reply filed by the taxpayer is neither proper nor satisfactory. No satisfactory reply/explanation has been received from the taxpayer despite adequate and repeated opportunities being given. Hence demand created accordingly.”
11. A reading of the impugned order makes it clear that the same has been passed in a mechanical manner without duly considering the reply of the Petitioner or affording the Petitioner with an opportunity to be heard.
12. This Court is of the opinion that since the Petitioner has not been afforded an opportunity to be heard and the said SCN and the consequent impugned order have been passed without hearing the Petitioner, an opportunity ought to be afforded to the Petitioner to contest the matter on merits.
13. Accordingly, the impugned order is set aside. The Adjudicating Authority shall issue to the Petitioner, a notice for personal hearing. The personal hearing notice shall be communicated to the Petitioner by 10th July, 2025, on the following mobile no. and e-mail address: Mobile No.: 9312315121 E-mail Address: prabhat@rklegal.org
14. The reply dated 21st June, 2024, filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and a fresh order with respect to the SCN shall be passed in accordance with law.
15. 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.
16. All rights and remedies of the parties are left open. Access to the GST Portal shall be provided to the Petitioner to enable uploading of necessary documents, if any, as also to access the notices and related documents.
17. The present writ petition is disposed of in above terms. All the pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 6, 2025/dk/ss (corrected & released on 13th May, 2025)