Full Text
HIGH COURT OF DELHI
Date of Decision: 01st May, 2025
M/S KESHAV METALS THROUGH PROPRIETOR SHRI SUNIL
KHANDELWAL .....Petitioner
Through: Mr Vijay Gupta and Mr Rahul Gupta, Advocates.
Through: Ms. Vaishali Gupta, Advocate.
Prathiba M. Singh, J. (Oral)
JUDGMENT
1. This hearing has been done through hybrid mode. CM APPL. 26178/2025(for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of.
3. The present petition has been filed by the Petitioner – M/s Keshav Metals through proprietor Shri Sunil Khandelwal under Article 226 of the Constitution of India challenging the order dated 11th August, 2024 (hereinafter ‘impugned order’) arising pursuant to show cause notice dated 21st May, 2024 (hereinafter ‘SCN’) by which demand has been raised to the tune of Rs. 1,35,99,517/- (Rs. 66,23,407/- for the SGST + Rs. 66,23,407/- for the CGST + Rs. 352703/- for IGST).
4. The case of the Petitioner is that the SCN is undated and was not received by the Petitioner. It is also not properly signed. The Petitioner vide the present petition also raises a challenge to Notification No. 56/2023 State Tax (hereinafter, ‘the impugned notification’).
5. The impugned notification has also been challenged in a batch of petitions. The W.P.(C) No. 16499/2023 titled DJST Traders Private Limited v. Union of India & Ors. is the lead matter in the said batch of petitions. On the last date of hearing i.e., 22rd April, 2025, the parties were heard at length qua the validity of the impugned notifications and accordingly, the following order was passed:
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:
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:
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.”
6. As observed by this Court in the order dated 22nd April, 2025 as well, since the challenge to the above mentioned notifications is presently under consideration before 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 challenge made by the Petitioner to the impugned notification in the present proceedings shall also be subject to the outcome of the decision of the Supreme Court.
7. On facts, however, the submission of the Petitioner is that the SCN dated 21st May, 2024, from which the impugned order arises, was uploaded on the ‘Additional Notices Tab’ - therefore, the same did not come to the knowledge of the Petitioner. The impugned order dated 11th August, 2024 was passed without providing the Petitioner a personal hearing and in the absence of a reply on behalf of the Petitioner.
8. In fact this Court in W.P.(C) 13727/2024 titled ‘Neelgiri Machinery through its Proprietor Mr. Anil Kumar V. Commissioner Delhi Goods And Service Tax And Others’, under similar circumstances where the SCN was uploaded vide ‘Additional Notices Tab’ had remanded the matter in the following terms:
Private Ltd. v. Union of India & Ors.: Neutral Citation NO. 2024:DHC:4108-DB as well as in Kamla Vohra v. Sales Tax Officer Class II/ Avato Ward 52: Neutral Citation No.2024:DHC:5108- DB.
7. He states that possibly, the petitioner did not had the access of the Notices as they were projected on the GST Portal under the tab ‘Additional Notices & Orders’. He submits that the said issue has now been addressed and the ‘Additional Notices & Orders’ tab is placed under the general menu and adjacent to the tab ‘Notices & Orders’.
8. In view of the above, the present petition is allowed and the impugned order is set aside.
9. The respondent is granted another opportunity to reply to the impugned SCN within a period of two weeks from date. The Adjudicating Authority shall consider the same and pass such order, as it deems fit, after affording the petitioner an opportunity to be heard.
10. The present petition is disposed of in the aforesaid terms.
11. All pending applications are also disposed of.”
7. The impugned demand orders dated 23rd April, 2024 and 5th December, 2023 are accordingly set aside. In response to show cause notices dated 04th December, 2023 and 23th September, 2023, the Petitioner shall file its replies within thirty days. The hearing notices shall now not be merely uploaded on the portal but shall also be e-mailed to the Petitioner and upon the hearing notice being received, the Petitioner would appear before the Department and make its submissions. The show cause notices shall be adjudicated in accordance with law.
8. The petitions are disposed of in the above terms. The pending application(s), if any, also stand disposed of.”
9. It is relevant to note that post 16th January 2024, the Department has effected changes in the portal to ensure that the SCNs become visible to parties. Though the SCN in the present case is of May 2024, considering the Petitioner has not been afforded an opportunity to file a reply or given a personal hearing, following the above decision in W.P.(C) 13727/2024, the impugned order is set aside.
10. Let the reply be filed by the Petitioner within 30 days. Thereafter the Petitioner shall be also given a personal hearing and the notice for personal hearing shall be sent to the Petitioner on the following email ID: E-mail Address: RahulGupta219A@gmail.com
11. Let the entire matter be considered afresh and an order be passed on merits after duly considering the reply and the submissions made by the Petitioner in the personal hearing.
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.
13. 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 1, 2025/da/Ar.