Delhi High Court
M/S K.K. Construction Co vs Commissioner Of Sgst, Delhi & Anr on 26 August, 2025
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~51
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 26th August, 2025
+ W.P.(C) 12943/2025
M/S K.K. CONSTRUCTION CO. .....Petitioner
Through: Mr. Shailender Verma, Mr. Subhash
Chandra Gupta, Mr. Siddhartha Verma
& Mr. Amrish Kumar Gautam Advs.
(M:9811121653)
versus
COMMISSIONER OF SGST, DELHI & ANR. .....Respondents
Through: Mr. Sumit K. Batra, Adv.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE SHAIL JAIN
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner- M/s K.K.
Construction Co. through its Proprietor, under Article 226 of the Constitution
of India, inter alia, challenging the Show Cause Notice dated 8th December,
2023 (hereinafter 'SCN') and the impugned order dated 22nd April, 2024
(hereinafter 'impugned order') passed in respect of Financial Year 2018-19
by the office of Sales Tax Officer Class II/ AVATO, Delhi. Vide the impugned
order a demand of Rs. 4,12,73,823/- has been raised against the Petitioner.
3. Additionally, the petition also challenges the vires of Notification No.
9/2023-Central Tax dated 31st March, 2023 and Notification No. 56/2023-
Central Tax dated 28th December, 2023. Ld. Counsel for the Petitioner
submits that the challenge is to the Notification 9/2023-State Tax dated 31st
March, 2023 and Notification 56/2023-State Tax dated 11th July, 2024
(hereinafter 'impugned notification') and inadvertently, the Central
notifications have been attached. Let copies of the impugned notifications be
handed over to the Court Master today itself. The same shall be taken on
record.
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:
"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. 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. 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. On the facts of the present case, the SCN was issued to the Petitioner
on various grounds including in respect of reconciliation of GSTR-01 and
GSTR-3B as also excess claim of Input Tax Credit. A reminder was issued on
29th February, 2024 and a reply was filed on 9th March, 2024. The case of the
Petitioner is that along with the said reply various documents were also filed
and the Petitioner's authorized representative had also attended the personal
hearing. However, the impugned order has been passed without considering
the reply of the Petitioner.
8. Ld. Counsel for the Petitioner has handed across the returns in Form
GSTR-1 and GSTR-3B and the same are taken on record. He submits that, in
fact, in the GSTR-01, by mistake the amount of total taxable value under B2C
was reflected as Rs. 18,74,65,561/-, whereas in the GSTR-3B the amount was
correctly mentioned as Rs. 1,06,31,785/-. It is submitted by the ld. Counsel
for the Petitioner that this was due the inadvertent mistake made by the
Petitioner's accountant and it was on the said basis that the SCN itself came
to be issued.
9. Ld. Counsel for the Department submits that the impugned order has
been challenged very belatedly, in fact one and a half years later. He submits
that the Petitioner has already appeared for the personal hearing and has
explained its position to the Adjudicating Authority, subsequent to which, the
impugned order has been passed. Thus, the Petitioner ought to be relegated to
pursue the appellate remedy.
10. The Court has considered the matter. The returns which have been
handed over i.e., GSTR-01 and GSTR-3B show completely different figures
and the question as to which of the figures is correct would have to be
ascertained after going through all the documents which the Petitioner may
file. In the opinion of the Court, this would also require a factual analysis
which cannot be done in this writ petition.
11. Accordingly, the Petitioner is relegated to avail of the appellate remedy.
Let the appeal be filed by 15th October, 2025 along with the requisite pre-
deposit. If the same is filed by the said date, it shall not be dismissed on the
ground of limitation and shall be considered on merits.
12. The order of the Appellate Authority shall be subject to the outcome of
the decision of the Supreme Court and of this Court in W.P.(C) 9214/2024
titled 'Engineers India Limited v. Union of India & Ors'.
13. At this stage, ld. Counsel for the Petitioner submits that he may be
permitted to rectify the returns. The limitation for the same has already
expired, however, if there is any remedy in law for the Petitioner to file a
rectified return, he is permitted to do so.
14. The petition is disposed of in these terms. Pending applications, if any,
are also disposed of.
PRATHIBA M. SINGH
JUDGE
SHAIL JAIN
JUDGE
AUGUST 26, 2025
dj/msh
