Vijay And Company Through Its ... vs Commissioner Delhi Goods And Service ...
2025 Latest Caselaw 4342 Del

Delhi High Court

Vijay And Company Through Its ... vs Commissioner Delhi Goods And Service ... on 23 April, 2025

Author: Prathiba M. Singh

Bench: Prathiba M. Singh

                          $~164
                          *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                             Date of decision: 23rd April, 2025
                          +         W.P.(C) 8227/2024 and CM APPL. No. 33852/2024

                                 VIJAY AND COMPANY THROUGH ITS PROPRIETOR MRS
                                 SEEMA TAYAL                           .....Petitioner
                                              Through: Mr. Rakesh Kumar, Advocate

                                                   versus

                                 COMMISSIONER DELHI GOODS AND SERVICE TAX AND
                                 OTHERS                                 .....Respondents
                                             Through: Mr. Udit Malik, Advocate

                                 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 - Vijay and Company through its Proprietor Mrs Seema Tayal under Article 226 of the Constitution of India inter alia challenging the adjudication order dated 5th April, 2024 (hereinafter, 'the impugned order') passed by the Assistant Commissioner, Ward 75, Zone 7, Delhi under Section 73 of the Delhi/Central Goods and Services Tax Act, 2017 (hereinafter, 'DGST/CGST Act, 2017'):

3. Additionally, the present petition also inter alia challenges the Notification No. 09/2023- Central Tax dated 31st March, 2023 and Notification No. 56/2023- Central Tax dated 28th December, 2023 issued by the 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 is a non-speaking one, passed without providing the Petitioner sufficient opportunity of being heard and has been passed in violation of Principles of Natural Justice.

7. The Court has perused the record. The impugned order arises from the show cause notice dated 8th December, 2023. The DRC-06 Forms attached with the petition clearly reveal that sufficient opportunities were afforded to the Petitioner to file a reply. It is only upon the failure of the Petitioner to file the same, that the Ld. Assistant Commissioner has proceeded to pass the impugned order confirming the demand to the tune of Rs. 35,03,595/-.

8. Considering these circumstances, this Court is not inclined to set aside the impugned order.

9. Accordingly, the petition is disposed of with the liberty to Petitioner to

prefer an appeal challenging the impugned order within 30 days.

10. If the appeal along with the requisite pre-deposit provided under Section 107 of the Central Goods and Services Tax Act, 2017 is filed within a period of 30 days, the same shall not be dismissed on the ground of limitation and shall be entertained and adjudicated on merits.

11. However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. The order of the Appellate Authority shall be subject to the outcome of the decision of the Supreme Court.

12. Pending applications, if any, are also disposed of.

PRATHIBA M. SINGH JUDGE

RAJNEESH KUMAR GUPTA JUDGE APRIL 23, 2025 SV/Ar.

(corrected & released on 28th April, 2025)