MS Shree Saravana Trading Corp v. Sales Tax Officer Class II VATO Ward 39 State Goods and Service Tax & Anr

Delhi High Court · 22 Aug 2025 · 2025:DHC:7222-DB

Prathiba M. Singh; Shail Jain

W.P.(C) 12726/2025

2025:DHC:7222-DB

tax petition_dismissed Significant

AI Summary

The Delhi High Court allowed the petitioner to file a belated appeal against a GST demand order pending the Supreme Court’s decision on the validity of the underlying notification, without deciding the notification’s validity at the writ stage.

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W.P.(C) 12726/2025
HIGH COURT OF DELHI
Date of Decision: 22nd August, 2025

W.P.(C) 12726/2025, CM APPL. 51981/2025 & CM APPL.
51982/2025 MS SHREE SARAVANA TRADING CORP THROUGH ITS
PROPRIETOR PUSHPA F.Y 2017-18 .....Petitioner
Through: Mr. Anurag Rajput, Adv.

VERSUS

SALES TAX OFFICER CLASS II VATO WARD 39 STATE GOODS
AND SERVICE TAX & ANR .....Respondents
Through: Mr. Sumit K. Batra, Adv.

CORAM:

JUSTICE PRATHIBA M. SINGH JUSTICE SHAIL JAIN 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- M/s Shree Saravana Trading Corp. under Articles 226 and 227 of the Constitution of India, inter alia, challenging the impugned order dated 31st December, 2023 (hereinafter ‘impugned order’) passed in respect of F.Y. 2017-18 by the office of Sales Tax Officer Class II/ AVATO, Delhi wherein a demand of Rs. 3,49,024/- has been raised on the Petitioner.

3. One of the grounds raised by the Petitioner in the present petition is that the Notification No.09/2023- Central Tax dated 31st March, 2023 is invalid and ultra vires and is liable to be set aside.

4. The validity of the said notification 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 notification and accordingly, the following order was passed:

“4. Submissions have been heard in part. The broad challenge to both sets of Notifications is on the ground that the proper procedure was not followed prior to the issuance of the same. In terms of Section 168A, prior recommendation of the GST Council is essential for extending deadlines. In respect of Notification no.9, the recommendation was made prior to the issuance of the same. However, insofar as Notification No. 56/2023 (Central Tax) the challenge is that the extension was granted contrary to the mandate under Section 168A of the Central Goods and Services Tax Act, 2017 and ratification was given subsequent to the issuance of the notification. The notification incorrectly states that it was on the recommendation of the GST Council. Insofar as the Notification No. 56 of 2023 (State Tax) is concerned, the challenge is to the effect that the same was issued on 11th July, 2024 after the expiry of the limitation in terms of the Notification No.13 of 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:

“1. The subject matter of challenge before the High Court was to the legality, validity and propriety of the Notification No.13/2022 dated 5-7-2022 & Notification Nos.9 and 56 of 2023 dated 31-3-2023 & 8-12-2023 respectively. 2. However, in the present petition, we are concerned with Notification Nos.9 & 56/2023 dated 31-3-2023 respectively. 3. These Notifications have been issued in the purported exercise of power under Section 168 (A) of the Central Goods and Services Tax Act. 2017 (for short, the "GST Act"). 4. We have heard Dr. S. Muralidhar, the learned Senior counsel appearing for the petitioner. 5. The issue that falls for the consideration of this Court is whether the time limit for adjudication of show cause notice and passing order under Section 73 of the GST Act and SGST Act (Telangana GST Act) for financial year 2019-2020 could have been extended by issuing the Notifications in question under Section 168-A of the GST Act. 6. There are many other issues also arising for 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:

“65. Almost all the issues, which have been raised before us in these present connected cases and have been noticed hereinabove, are the subject matter of the Hon'ble Supreme Court in the aforesaid SLP. 66. Keeping in view the judicial discipline, we refrain from giving our opinion with respect to the vires of Section 168-A of the Act as well as the notifications issued in purported exercise of power under Section 168-A of the Act which have been challenged, and we direct that all these present connected cases shall be governed by the judgment passed by the Hon'ble Supreme Court and the decision thereto shall be binding on these cases too. 67. Since the matter is pending before the Hon'ble Supreme Court, the interim order passed in the present cases, would continue to operate and would be governed by the final adjudication by the Supreme Court on the issues in the aforesaid SLP- 4240-2025. 68. In view of the aforesaid, all these connected cases are disposed of accordingly along with pending applications, if any.”

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 notification 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 in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.

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’.

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7. On facts, it is submitted by ld. Counsel that the Petitioner had filed an application for cancellation of the GST registration on 18th March, 2023. Thereafter, the Show Cause Notice dated 29th September, 2023 was issued to the Petitioner. Two replies dated 9th October, 2023 and 19th October, 2023 were filed by the Petitioner to the said Show Cause Notice dated 29th September, 2023. Thereafter, the impugned order was passed, raising certain demands on the Petitioner.

8. Further submission on behalf of the Petitioner is that the personal hearing with respect to the Show Cause Notice dated 29th September, 2023 was not attended by the Petitioner and, therefore, the matter shall be remanded for fresh adjudication, since the impugned order was passed without duly hearing the Petitioner.

9. Mr. Batra, ld. Counsel opposes the contention of the Petitioner and submits that the replies to the Show Cause Notice have been filed by the Petitioner. Thus, they had proper knowledge of the proceedings. Accordingly, the matter ought not to be remanded to the adjudicating authority. He also raises a further objection that the challenge to the impugned order is extremely belated.

10 Heard. There is no doubt that the challenge in the present case is belated as the impugned order itself is of 31st December, 2023 i.e., almost two years ago. There is no explanation provided by the Petitioner to substantiate such delay, however, the submission of ld. Counsel for the Petitioner is that the impugned order was uploaded on the ‘additional notices tab’ of the GST Portal and had skipped the attention of the Petitioner. Be that as it may, considering that Notification No.09/2023- Central Tax dated 31st March, 2023 has been challenged in this petition and the validity of the said notification is still pending consideration before the Supreme Court, it is deemed appropriate to permit the Petitioner to avail of the appellate remedy under Section 107 of the Central Goods and Service Tax Act, 2017.

11. Accordingly, the Petitioner is granted time till 15th October, 2025 to file its appeal along with the requisite pre-deposit.

12. The access to the GST portal shall be made available to the Petitioner within a period of one week for filing of the appeal and other necessary documents.

13. If the appeal is filed by the Petitioner within the stipulated time, it shall be adjudicated on merits and shall not be treated as barred by limitation.

14. All rights and contentions of parties are left open.

15. It is further made clear that the decision of the Appellate Authority shall be subject to 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. Accordingly, the present writ petition is disposed of in above terms. All pending applications are also disposed of.

PRATHIBA M. SINGH JUDGE SHAIL JAIN JUDGE AUGUST 22, 2025 dj/ss

MS Shree Saravana Trading Corp v. Sales Tax Officer Class II VATO Ward 39 State Goods and Service Tax & Anr

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