Delhi High Court
Sr Metals Through Its Proprietor Bal ... vs Assistant Commissioner Ward 63 State ... on 27 May, 2025
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~54
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 27th May, 2025
+ W.P.(C) 7418/2025 & CM APPL. 33244/2025, CM APPL.
33245/2025
SR METALS THROUGH ITS PROPRIETOR BAL KRISHAN
ANAND .....Petitioner
Through: Mr. Anurag Rajput, Mr. Sahib Rajput,
Mr. Sahil Puri & Mr. Dhruv Bhardwaj,
Advs.
versus
ASSISTANT COMMISSIONER WARD 63 STATE GOODS AND
SERVICE TAX & ORS. .....Respondents
Through: Ms. Vaishali Gupta, Panel Counsel
(Civil), GNCTD.
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. 33244/2025 (for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of.
W.P.(C) 7418/2025 & CM APPL. 33245/2025
3. The present petition has been filed by the Petitioner- M/s SR Metals
through its Proprietor Bal Krishan Anand challenging order dated 29th August,
2024 (hereinafter, 'the impugned order') passed under Section 73 of the
Central Goods and Services Tax Act, 2017 (hereinafter, 'CGST Act, 2017').
The impugned order arises from the Show Cause Notice dated 15th May, 2024
(hereinafter, 'the SCN') issued upon the Petitioner concern for the tax period
April, 2019 to March, 2020.
4. Additionally, the present petition also challenges the Notification No.
56/2023-Central Tax dated 28th December, 2023 and Notification No.
56/2023-State Tax dated 11th July, 2024 issued by the Central Board of
Indirect Taxes and Customs (hereinafter, 'the impugned notifications').
5. The impugned notifications were under consideration before this Court
in a batch of matters with the lead matter 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.
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. In the present case, the submission of the Petitioner, on facts, is that the
SCN was issued to the Petitioner on 15th May, 2024. Thereafter, a reply was
filed by the Petitioner on 2nd August, 2024. Hearing notice was afforded to
the Petitioner. The reminder dated 16th July, 2024 was issued for personal
hearing. The second remainder was sent on 30th July, 2024. However, the
personal hearing was not attended by the Petitioner.
9. The submission of ld. Counsel for the Petitioner is that the detailed
reply was given vide which some of the demands raised against it were also
accepted by the Petitioner. However, the same has not been duly considered
by the concerned Adjudicating Authority in passing the order.
10. Heard. The Court has also perused the records. A perusal of the
Petitioner's reply dated 2nd August, 2024 which would show it is a detailed
reply showing the manner in which the reconciliation between various
accounts has been carried out and how other traders have also filed their
returns reflecting the Petitioner's availment as well of Input Tax Credit.
11. In view of the fact that the Petitioner did not avail the opportunity of
personal hearing and the detailed reply submitted by the Petitioner has not
been duly considered, coupled with the fact the impugned notifications based
on which the SCN has been issued on an extended period of limitation, is
under challenge before the Supreme Court, this Court is of the opinion that
the matter deserves to be remanded back to be heard on merits.
12. Accordingly the impugned order is set aside and the matter is remanded
back to the concerned Adjudicating Authority. The Adjudicating Authority
shall provide the Petitioner a personal hearing and the notice for the same
shall be provided to the Petitioner on the following email id and phone
number:
Email ID: [email protected]
Phone Number: 9953029394
13. The Adjudicating Authority shall consider the reply and the
submissions made by the Petitioner in the personal hearing and duly pass an
order on merits.
14. All the rights and remedies of the parties are left open. Access to the
GST Portal, if not already available, shall be ensured to be provided to the
Petitioner to enable access to the notices and related documents.
15. However, it is again made clear that the issue in respect of the validity
of the impugned notifications is left open and the order of 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. The petition is disposed of in the above terms. Pending application, if
any, are also disposed of.
PRATHIBA M. SINGH
JUDGE
RAJNEESH KUMAR GUPTA
JUDGE
MAY 27, 2025
Rahul/Ar.
