Delhi High Court
Sparkle Gold Through Its Partner Mr. ... vs Commissioner Of Delhi Goods And ... on 27 May, 2025
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~35
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 27th May, 2025
+ W.P.(C) 6022/2025
SPARKLE GOLD THROUGH ITS PARTNER MR. BRIJESH
JAISWAL .....Petitioner
Through: Mr. Rakesh Kumar, Mr. Parveen
Gambhir and Mr. Akul Mangla,
Advocates.
versus
COMMISSIONER OF DELHI GOODS AND SERVICES TAX
AND ORS .....Respondents
Through: Mr. Sumit K. Batra, Advocate for
GNCTD.
Mr. Nishant Gautam, CGSC with Mr.
Prithvi and Mr. Vipul Verma,
Advocates for UOI.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE RAJNEESH KUMAR GUPTA
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
CM APPL. 27563/2025 (for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of.
W.P.(C) 6022/2025
3. The present petition has been filed by the Petitioner- M/s Sparkle Gold
under Article 226 of the Constitution of India, inter alia, assailing the Show
Cause Notice dated 24th May, 2024 (hereinafter, 'the SCN'), as also the
consequent order dated 23rd July, 2024 passed by the Sales Tax Officer Class
II/AVATO for the tax period April 2019 to March 2020.
4. The petition also challenges the vires of Notification No. 09/2023-
Central Tax dated 31st March 2023, Notification No. 56/2023-Central Tax
dated 28th December 2023 and Notification No. 56/2023-State Tax dated
11th July 2024 (hereinafter, 'impugned notifications').
5. 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 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."
6. 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.
7. 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.
8. On facts, however, the submission of the Petitioner is that the SCN
dated 24th May, 2024, from which the impugned order arises, was uploaded
on the 'Additional Notices Tab'; therefore, the same did not come to the
knowledge of the Petitioner. Moreover, a reminder notice was issued to the
Petitioner on 24th June, 2024, however, the same was uploaded on the
'Additional Notices Tab'. The impugned order dated 23rd July, 2024 was
passed without providing the Petitioner a personal hearing and in the absence
of a reply on behalf of the Petitioner.
9. Ld. Counsel for the Petitioner further submits that the Petitioner's GST
registration was cancelled on 8th May, 2024 retrospectively w.e.f., 6th
September, 2018. The said cancellation was set aside by order dated 6th May,
2025 in W.P.(C) 5965/2025 with the following order :
"3. The present petition has been filed by Petitioner - Sparkle
Gold through its partner Mr. Brijesh Jaiswal under Article 226
and 227 of the Constitution of India, inter alia, seeking issuance
of an appropriate writ directing the Respondents to cancel the GST
Registration certificate of the Petitioner with effect from 1st
February, 2023.
4. Further, the Petitioner has inter alia challenged the order
bearing reference no. ZA070524039899X dated 8th May, 2024
(hereinafter, 'impugned order') by which the Petitioner's GST
registration has been cancelled retrospectively with effect from 6th
September, 2018.
5. The case of the Petitioner is that the Petitioner had applied
for cancellation of its GST registration with effect from 1st
February, 2023 as the Petitioner had found it difficult to run his
business. The said application was filed on 16th February, 2023.
However, a Show Cause Notice was issued to the Petitioner on 05th
April, 2024 on the ground that the returns were not filed by the
Petitioner for the previous six months. The application for
cancellation of GST registration was rejected vide order dated 8th
April, 2024. No reply was filed by the Petitioner to the Show Cause
Notice dated 05th April, 2024 and hence the impugned order has
been passed.
6. This Court notices that the impugned order has been
passed without notice to the Petitioner. Further, in respect of non-
filing of returns, since the Petitioner itself had sought cancellation
of GST registration with effect from 1st February, 2023, filing of
returns for subsequent periods would not arise.
7. In view thereof the impugned order is modified and the
cancellation of registration shall be with effect from 1st
February, 2023 as prayed by the Petitioner. Let the department
carry out the necessary changes in the GST records.
8. The petition is allowed and disposed of in these terms.
Pending application(s), if any, also stand disposed of."
10. In fact this Court in W.P.(C) 13727/2024 titled 'Neelgiri Machinery
through its Proprietor Mr. Anil Kumar V. Commissioner Delhi Goods And
Service Tax And Others', under similar circumstances where the SCN was
uploaded vide 'Additional Notices Tab' had remanded the matter in the
following terms:
"6. Be that as it may, intention is to ensure that the Petitioner is
given an opportunity to file its reply and is heard on merits and that
orders are not passed in default. Since there is no clarity on behalf
of the Department, this Court follows the order dated 9th
September, 2024 in Satish Chand Mittal (Trade Name National
Rubber Products) vs. Sales Tax Officer SGST, Ward 25-Zone 1
(W.P.(C) 12589/2024; DHC) as also order dated 23rd December,
2024 in Anant Wire Industries vs. Sales Tax Officers Class
II/Avato, Ward 83 & Anr (W.P.(C) 17867/2024; DHC) where the
Court under similar circumstances has remanded back the matter
to ensure the Noticee/Petitioners get a fair opportunity to be heard.
The order of the Court in Sathish Chand Mittal (Supra) reads as
under:
"4. It is the petitioner's case that he had not received the
impugned SCN and, therefore, he had no opportunity to
respond to the same. For the same reason, the petitioner
claims that he had not appear for a personal hearing before
the Adjudicating Authority, which was scheduled on
17.10.2023 and later rescheduled to 30.11.2023 as per the
Reminder.
5. The petitioner also states that the impugned SCN, the
Reminder and the impugned order are unsigned.
6. Mr. Singhvi, the learned counsel appearing for the
respondent, on advance notice, fairly states that the principal
issue involved in the present case is squarely covered by the
decisions of this Court in M/s ACE Cardiopathy Solutions
Private Ltd. v. Union of India & Ors.: Neutral Citation No.
2024:DHC:4108-DB as well as in Kamla Vohra v. Sales Tax
Officer Class II/ Avato Ward 52 : Neutral Citation
No.2024:DHC:5108- DB.
7. He states that possibly, the petitioner did not had the
access of the Notices as they were projected on the GST
Portal under the tab 'Additional Notices & Orders'. He
submits that the said issue has now been addressed and the
'Additional Notices & Orders' tab is placed under the
general menu and adjacent to the tab 'Notices & Orders'.
8. In view of the above, the present petition is allowed and
the impugned order is set aside.
9. The respondent is granted another opportunity to reply to
the impugned SCN within a period of two weeks from date.
The Adjudicating Authority shall consider the same and pass
such order, as it deems fit, after affording the petitioner an
opportunity to be heard.
10. The present petition is disposed of in the aforesaid terms.
11. All pending applications are also disposed of."
7. The impugned demand orders dated 23rd April, 2024 and 5th
December, 2023 are accordingly set aside. In response to show
cause notices dated 04th December, 2023 and 23th September,
2023, the Petitioner shall file its replies within thirty days. The
hearing notices shall now not be merely uploaded on the portal but
shall also be e-mailed to the Petitioner and upon the hearing notice
being received, the Petitioner would appear before the Department
and make its submissions. The show cause notices shall be
adjudicated in accordance with law.
8. The petitions are disposed of in the above terms. The pending
application(s), if any, also stand disposed of."
11. There is no doubt that after 16th January 2024, changes have been made
to the GST portal and the 'Additional Notices Tab' has been made visible.
However, in the present case, the writ petition was filed in the year 2025,
raising issues as to the validity of the impugned notifications. Under such
circumstances, considering the fact that the Petitioner did not get a proper
opportunity to be heard, the GST registration of the Petitioner was cancelled
retrospectively and no reply to the SCN has been filed by the Petitioner, the
matter deserves to be remanded back to the concerned Adjudicating
Authority.
12. Accordingly, the impugned order is set aside. The Petitioner is granted
time till 15th July 2025, to file the reply to 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 e-mail address and mobile number:
Email ID: [email protected]
Mobile No.: 9810220294
13. The reply filed by the Petitioner to the SCN along with the submissions
made in the personal hearing proceedings shall be duly considered by the
Adjudicating Authority and a fresh order with respect to the SCN shall be
passed accordingly.
14. 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 filing of the reply as also access to the notices and related documents.
15. 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 this Court in W.P.(C) 9214/2024
titled Engineers India Limited v. Union of India &Ors.
16. 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 27, 2025/nd/ck
