Full Text
HIGH COURT OF DELHI
Date of Decision: 28th May, 2025
PANKAJ GARG .....Petitioner
Through: Mr. Vikas Jain, Mr. Aviral Saxena, Mr. Hardik Jayal, Ms. Shrawani and
Mr. Nilesh Singh, Advocates.
Through: Mr. Sumit K. Batra, Advocate for GNCTD.
Prathiba M. Singh, J. (Oral)
JUDGMENT
1. This hearing has been done through hybrid mode. CM APPL. 33238/2025 (for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of. W.P.(C) 7414/2025 & CM APPL. 33237/2025 (for stay)
3. The present petition has been filed by the Petitioner – Pankaj Garg under Articles 226 and 227 of the Constitution of India seeking to quash the Document/Show Cause Notice dated 19th November, 2024 along with its attachments, as also seeking to quash the ex-parte order dated 19th February, 2025 (hereinafter ‘impugned order’) passed under Section 73(9) of the Central Goods and Services Tax Act (hereinafter ‘the Act’).
4. The present case is a curious case where the Petitioner seeks to describe the Document/Show Cause Notice dated 19th November, 2024 and summary thereof, issued by the Respondent-Delhi GST Department (hereinafter ‘Department’), as not being a valid Show Cause Notice under Section 73 of the Act on two grounds;
(i) that the title of the Show Cause Notice reads - `Summary of
(ii) that there is actually no Show Cause Notice given to the
5. Mr. Vikas Jain, ld. Counsel appearing for the Petitioner submits that the Department has in fact not served any Show Cause Notice on the Petitioner and, therefore, the Petitioner was not under any obligation to reply to the same. The reason why ld. Counsel argues so, is because, apart from the Form GST DRC-01, there is merely a summary which is attached to the said Form and there is no Show Cause Notice which is attached. Ld. Counsel has taken pains to take the Court through two decisions in support of his case, which are as under:
(i) Construction Catalysers vs. State of Assam [W.P.(C) 3912/2024
(ii) Metal Forgings and Another vs. Union of India [(2003) 2 SCC
36].
6. He has also placed on record other sample notices which are issued by the Department, which are titled as Show Cause Notice under Section 73 of the Act, which in this case has not been issued. Hence the said document, according to the ld. Counsel for the Petitioner, cannot be treated as a Show Cause Notice that has been duly issued to the Petitioner.
7. Mr. Sumit K. Batra, ld. Counsel appearing for Department firstly submits that this is a case where the Input Tax Credit (hereinafter ‘ITC’) has been availed by the Petitioner from cancelled dealers, defaulters and nonpayers of tax. The two entities from whom ITC has been availed of are Mangal International and Gupta Metals.
8. It is submitted that Mangal International is the Sole Proprietorship concern of one Mr. Rahul Kumar, who has given a statement to the Department that his PAN Card has been wrongly utilized and in fact, he has not had any transaction with the Petitioner. However, on a query from the Court, Mr. Batra, ld. Counsel concedes that the title of the document is, in fact, wrongly described as ‘Summary of Show Cause Notice’.
9. The Court has heard the matter. It is noticed that the proceedings emanate from a letter which is uploaded on the dashboard of the Petitioner’s GST portal. For ease of reference, a screenshot of the portal is extracted below:
10. A perusal of the above image clearly indicates that the document dated 19th November, 2024, has been described as a ‘Show Cause Notice and summary thereof in Form GST DRC-01’. However, in light of the contentions raised, it is not sufficient to rely solely on the screenshot reflecting the document’s title; rather, the contents of the document itself need to be examined to determine its true character and legal sufficiency. Therefore, the Document in dispute is also extracted below:
11. A perusal of the above document reveals that while the document description on the portal is accurate, the title of the document at page no.78 incorrectly reads ‘Summary of Show Cause Notice’. The appropriate title ought to have been ‘Show Cause Notice under Section 73 of the Act’. Furthermore, a review of page no. 80 also shows that this is a summary of the Show Cause Notice, wherein the tax heads have been mentioned and the declared tax has also been mentioned. Further, page nos. 81 to 82 of the petition, after giving all the details of the various heads, under which tax has been demanded concludes as under: “Therefore, it is proposed to assess the registered taxpayer for the net tax payable indicated above under Section 73 of the CGST/SGST/IGST Act. The registered taxpayer may therefore pay the tax along with interest and penalty as per applicable provisions of CGST/SGST/IGST Act and Rules and reply accordingly in DRC06 within stipulated time. The reply filed will be considered before passing the final assessment orders.”
12. A conjoint perusal of the above documents clearly shows: (a) that there is a notice under Section 73 of the Act; (b) It is described as a Show Cause Notice in the dashboard; (b) that the Title wrongly states summary of Show Cause Notice;
(c) that a reply is expected from the Assessee.
After having perused the above documents, it is clear that any Assessee, who is regularly using the GST portal clearly would know that the description on the same is stated as show cause notice and summary thereof;
13. Further, the following aspects are also relevant:
(i) The watermark on the disputed document clearly states ‘Notice’
(ii) Three reminder notices are issued, which also clearly state as under: “With reference to the show cause notice referred above, neither you have filed any reply, nor you have appeared on the date mentioned in the notice to explain the reasons for the charges mentioned therein” mentioned therein.” mentioned therein.” These three reminders which have been issued describe the disputed document as a ‘Show Cause Notice’.
14. The Gauhati High Court in its judgment in Construction catalysers (supra) observed as under:
Cause Notice in GST DRC-01 is only the Statement of the determination of tax in terms with Section 73 (3). The said Statement of determination of tax cannot substitute the requirement for issuance of the Show Cause Notice by the Proper Officer in terms with Section 73 (1) of the Central or the State Act. Under such circumstances, initiation of the proceedings under Section 73 against the petitioners in the instant batch of writ petitions without the Show Cause Notice is bad in law and interfered with.”
15. A perusal of the above judgment reveals that in the matter under consideration, only a DRC-01 along with a summary was furnished to the Petitioner, and no formal Show Cause Notice was issued. It was in those specific circumstances that the Show Cause Notice was quashed. However, the facts of the present case are clearly distinguishable. It is well settled that an incorrect description of a document, by itself, does not negate its substantive content. In such situations, it is the substance of the document that must prevail over its form. The dashboard is clear, the watermark with the word ‘notice’ is clear and prominent and there can be no doubt that the document in question was a notice under Section 73 of the Act. A form DRC- 01 is itself in the nature of a notice to show-cause. The said summary states that it is a Show Cause Notice under Section 73 of the Act. The reminders which were given to the Petitioner also made it clear that the earlier document was a Show Cause Notice. Under such circumstances, the plea that the document is not a Show Cause Notice is a completely frivolous and a specious plea being taken by the Petitioner, to simply justify the non-filing of its reply.
16. While there is no doubt that the Department ought to take adequate precaution to ensure that such errors of misdescription do not occur, what appears to be merely an inadvertent error, in the light of all the accompanying documents and circumstances cannot be the basis for seeking quashing. In view thereof, this Court is of the opinion that the impugned order does not warrant interference in exercise of writ jurisdiction. In the totality of circumstances, this Court is unable to accept the Petitioner’s contention that the disputed document is merely a summary and not a Show Cause Notice, solely on the ground of an inadvertent misdescription in the title.
17. At this stage, ld. Counsel for the Petitioner prays for time to file an appeal challenging the impugned order. Considering the impugned order is an appealable order under Section 107 of the Act, the Petitioner is permitted to file an appeal along with the requisite pre-deposit by 15th July, 2025.
18. If the same is filed within the stipulated time, it shall not be dismissed on the ground of being barred by limitation and shall be adjudicated on merits.
19. The petition is disposed of in these terms. Pending application(s), if any, also stand disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 28, 2025/nd/Ar.