Full Text
HIGH COURT OF DELHI
Date of Decision: 14th May, 2025
VERTO BIZSERV .....Petitioner
Through: Mr. Akshay Allagh and Mr. Syed Ahmed Alamdar Rizvi, Advocates.
Through: Mr. Sumit K Batra, Advocate 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 challenging the Show Cause Notice dated 28th May, 2024 (hereinafter, ‘impugned SCN’) issued by the Department of Trade & Taxes, Government of N.C.T. of Delhi, pertaining to the Financial Year 2018-19, as also the consequent order dated 29th 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. 56/2023- Central Tax dated 28th December, 2023 and Notification No. 9/2023- Central Tax dated 31st March, 2023 as also Notification No. 56/2023- State Tax dated 11th July, 2024 and Notification No. 9/2023-State Tax dated 22nd June (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:
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. 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.
7. In the present case, the submission of the Petitioner, on facts, is that the impugned order is cryptic and non-reasoned. Further it is also submitted that the Petitioner did not file the reply to the impugned SCN and neither availed the opportunity for personal hearing on the account of the impugned SCN
(i) being unsigned and
(ii) being issued beyond the period of limitation.
In view thereof, impugned order, according to the Petitioner, is in violation of Principles of Natural Justice and thus, is liable to be set aside.
8. Heard. The Court has perused the records. The relevant portions of reasoning provided in the impugned order is extracted below: “Reconciliation of GSTR-01 with GSTR-3B: Observations and conclusion of the assessing authority: Agreed with SCN amount Specific reasons entered And whereas tax payer has been issued DRC-01 for the FY-2019- 20 and it is noticed that the Taxpayer neither filed reply/explanation within stipulated period nor appeared for Personal Hearing before Proper Officer on the given date and time. ********* Excess ITC availed in GSTR-3B compared to the tax on inward supplies declared by the suppliers: time. ********* ITC to be reversed on non-business transactions & exempt supplies: Observations and conclusion of the assessing authority: time. ********* Under declaration of Ineligible ITC: time. ********* ITC claimed from cancelled dealers, return defaulters & tax non payers: Agree with SCN amount time.”
9. A perusal of the above extraction reveals that the impugned order has been passed without providing the Petitioner an opportunity to present its case on merits. Considering the above submissions, and the fact that the challenge to the validity of impugned notifications are under consideration before the Supreme Court, this Court is inclined to provide the Petitioner another opportunity to file a reply and be heard on merits.
10. Accordingly, the impugned order is set aside. The Petitioner is granted time till 10th July 2025, to file the reply to impugned SCN. Upon filing of the reply, the Adjudicating Authority shall issue a notice for personal hearing to the Petitioner. The personal hearing notice shall be communicated to the Petitioner on the following mobile no. and e-mail address: Email ID: Rizvicompany@gmail.com Mobile: 8459430776
11. The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing shall be duly considered by the Adjudicating Authority and a fresh order shall be passed.
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 in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. and of this Court in W.P.(C) 9214/2024 titled Engineers India Limited v. Union of India &Ors.
13. 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 the reply as also access to the notices and related documents.
14. 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 14, 2025/nd/Ar.