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HIGH COURT OF DELHI
Date of Decision: 20th May, 2025
M/S AMBIIENCE METCORP PRIVATE LIMITED THROUGH ITS
DIRECTOR SH SANDEEP AGARWAL .....Petitioner
Through: Mr. R.P. Singh, Mr. Nirmal Dixit, Mr. Rahul Ranjan, Mr. Anant Vijay & Mr. Harshit Garg, Advs.
THROUGH ITS CHAIRMAN & ANR. .....Respondents
Through: Mr Aakarsh Srivastava, Senior Standing Counsel
Mr. Urvi Mohan, Adv. for GNCTD.
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 under Article 226 of the Constitution of India inter alia challenging the following:
(i) Show Cause Notice dated 24th May, 2024 (hereinafter, ‘impugned SCN’)
(ii) Order dated 29th
August, 2024 passed by the office of Sales Tax Officer Class II/ AVATO, Delhi (hereinafter, ‘impugned demand order’); and
(iii) Order dated 28th February, 2025 vide which application to rectify order dated 29th August, 2024 was rejected (hereinafter, ‘impugned rectification order’)
3. The petition also challenges the vires of Notification No. 56/2023- Central Tax dated 28th December, 2023 and Notification No. 9/2023- Central Tax dated 31st March, 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 notification and accordingly, the following order was passed:
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:
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.”
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 in S.L.P. NO. 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.
6. Firstly, ld. Counsel for the Petitioner today submits that he does not wish to press the challenges to the impugned notifications. On facts, however, the submission of the Petitioner is that a rectification application was filed on 30th September, 2024 seeking rectification of the impugned demand order. However no hearing was given to the Petitioner in the rectification application and the same has been rejected vide the impugned rectification order.
7. Ld. Counsel for the Petitioner points out that in terms of the proviso 3 to Section 161 of the Central/Delhi Goods and Services Tax Act, 2017 the Petitioner ought to have been afforded hearing while deciding the rectification application. The relevant portion of the said provision reads as under: “Provided also that where such rectification adversely affects any person, the principles of natural justice shall be followed by the authority carrying out such rectification.”
8. The Petitioner in this regard relies on the decision of this Court in W.P.(C) 4506/2025 titled ‘HVR Solar Private Limited v. Sales Tax Officer Class II AVATO Ward 67 & Anr’ (2025: DHC:2476-DB) wherein the matter was relegated on the grounds that a proper hearing was not provided in the rectification application therein.
9. Heard. The Court has perused the records. It is noticed that the detailed reply has been filed to the impugned Show Cause Notice. The impugned demand order is also a reasoned order. However, it is noticed that the impugned rectification order while dismissing the rectification application only states that the application filed by the Petitioner is found to be ‘unsatisfactory’ without recording any reasons to substantiate its finding. The same is extracted below:
10. A perusal of the above extract reveals that impugned rectification order is cryptic and non-speaking in nature. Further considering the fact that hearing, in terms of proviso 3 to Section 161 of the CGST/DGST Act, has not been provided, following the decision in HVR Solar Private Limtied (Supra), this Court is inclined to set aside the impugned rectification order.
11. Ordered accordingly. The matter is relegated back to the concerned Adjudicating Authority for the Petitioner to be provided a proper hearing in the rectification application. The notice for the personal hearing shall be provided to the Petitioner in the following email and mobile number: ● Email: usrlegaladvisors@gmail.com ● Mob. No.: 9990174008
12. Upon the hearing being held, the Adjudicating Authority shall pass a fresh order in the rectification application upon duly considering the submissions made by the Petitioner during the said hearing.
13. All the rights and remedies of the parties are left open. Access to the GST Portal, if not already available, shall be provided to the Petitioner to enable access to the notices and related documents.
14. Petition is disposed of in these terms. All pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 20, 2025 Rahul/Ar.