Delhi High Court
Kiran Agarwal Proprietor Jai Shri ... vs Govt Of Nct Of Delhi Through Chief ... on 23 April, 2025
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~157
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 23rd April, 2025
+ W.P.(C) 5638/2024 & CM APPLs.23248/2024, 63743/2024
KIRAN AGARWAL PROPRIETOR JAI
SHRI SANWARIYA TRADERS THROUGH ITS KARTA
SH KIRAN AGARWAL .....Petitioner
Through: Mr. A.K. Babbar, Adv.
(M:9811115749)
versus
GOVT OF NCT OF DELHI THROUGH
CHIEF SECRETARY & ORS. .....Respondents
Through: Mr. K.G. Gopalakrishnan, Ms. Nisha
Mohandas and Mr. Kunwar Raj Singh,
Advs for GNCTD.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE RAJNEESH KUMAR GUPTA
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner- challenging the
following show cause notices (hereinafter, 'the SCNs') issued by the
Department of Trade & Taxes, Government of N.C.T. of Delhi upon the Sole
Proprietor of the Petitioner concern, as also the subsequent Orders
(hereinafter, 'the impugned orders') passed under Section 73 of the
Delhi/Central Goods and Services Tax Act, 2017 (hereinafter, 'DGST/CGST
Act, 2017'):
● Show Cause Notice bearing Reference No.: ZD071223010229U dated
3rd December,2023 and Order dated 1st April, 2024 bearing Reference
No.: ZD070424000976E pertaining to Financial Year 2018-19 in
W.P.(C) 5119/2025;
● Show Cause Notice bearing Reference No.: ZD0705240148521 dated
20th May,2024 and Order dated 28th August, 2024 bearing Reference
No.: ZD070824099929E pertaining to Financial Year 2019-20 in
W.P.(C) 5027/2025.
3. Additionally, the present petitions also challenge the Notification Nos.
9/2023- Central Tax dated 31st March, 2023 and 56/2023- Central Tax dated
28th December, 2023 issued by the Ministry of Finance (Department of
Revenue), Central Board of Indirect Taxes and Customs (hereinafter, 'the
impugned notifications').
4. The present petition is a part of a batch of petitions wherein inter alia,
the impugned notifications have been challenged. 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:
"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. As observed by this Court in the order dated 22nd April, 2025, 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 notifications in the present
proceedings shall also be subject to the outcome of the decision of the
Supreme Court.
6. On facts, however, the submission of the Petitioner is that the impugned
order has been passed by the Sales Tax Officer II/AVATO, Ward 63, Zone 6
Delhi without considering the reply or providing a personal hearing.
7. The Court has perused the records. In this petition, as mentioned above,
the Petitioner has filed a reply to the SCN dated 25th September, 2023 on 11th
October, 2023. However, the impugned order has been passed on 24th
December, 2023 confirming the demand to the tune of Rs. 2,98,7 4,272/-
without considering the reply. In fact, a perusal of the order would show that
the same is cryptic and is in a template form. The relevant extract of the order
reads as under:
"A show cause notice/statement referred to above was
issued to you u/s 73 of the Act for reasons stated therein.
Since, no payment has been made within 30 days of the
issue of the notice by you; therefore, on the basis of
documents available with the department and
information furnished by you, if any, demand is
created for the reasons and other details attached in
annexure"
8. Under these circumstances, the Court is inclined to set aside the
impugned order and provide an opportunity to the Petitioner to be heard on
merits.
9. Accordingly, the impugned order is set aside. Let the notice of personal
hearing be given to the Petitioner on the following email address and the
mobile number.
Email- [email protected]
Phone Number- 9953000246
10. After hearing the Petitioner, the Adjudicating Authority shall pass the
order in accordance with law.
11. However, it is made clear that the issue in respect of the validity of the
impugned notification is left open. Any order passed by the Adjudicating
Authority shall be subject to the outcome of the decision of the Supreme
Court.
12. The present petition, along with all pending applications, is disposed of
in the above terms.
PRATHIBA M. SINGH
JUDGE
RAJNEESH KUMAR GUPTA
JUDGE
APRIL 23, 2025
Rahul/Ar.
(corrected & released on 28th April, 2025)
