M/S Nk Engineering Works vs. Sales Tax Offer Class-Ii/Avato
Original PDF →Facts
The Petitioner, M/s NK Engineering Works, challenged an order dated August 16, 2024, passed by the Respondent (Sales Tax Officer Class-II/AVATO) under Section 73 of the CGST Act. This order demanded Rs. 52,89,575/- from the Petitioner. The demand related to a reconciliation of returns filed for the period April 2019 to March 2020. The Petitioner's proprietor, Mrs. Harshana Gulati, stated that her husband, who managed the business daily, passed away on June 23, 2021. The Show Cause Notice for the period 2019-2020 was issued in 2024, requiring time for record reconciliation. The Petitioner requested an extension on June 18, 2024, which was not granted before the impugned order was passed.
Held
The Court held that in the extenuating circumstances explained by the Petitioner, specifically the death of the proprietor's husband who managed the business, and considering the delay in issuing the Show Cause Notice, the Petitioner should be granted time to file a detailed reply on merits. Consequently, the impugned order dated August 16, 2024, was set aside. The Petitioner was granted liberty to file their reply by June 15, 2025. A personal hearing would be provided, and after hearing the Petitioner, the Adjudicating Authority was directed to pass a fresh reasoned order, taking into account the Petitioner's stand. All rights and remedies of the Petitioner concerning the Adjudicating Authority's order were left open.
Key Issues
1. Whether the Petitioner should be granted an opportunity to file a detailed reply on merits to the Show Cause Notice, considering the extenuating circumstances of the proprietor's husband's passing and the delay in issuing the notice. Petitioner's Contention: The Petitioner argued that due to the death of the business's daily manager (husband of the proprietor) during COVID-19, and the significant delay in issuing the Show Cause Notice (issued in 2024 for the period 2019-2020), they required more time to reconcile records and file a proper reply. They specifically sought an extension to file their response, which was denied, leading to the impugned order. Respondent's Contention: The judgment does not record any specific arguments made by the Respondent. However, the passing of the impugned order implies the Respondent proceeded without granting the requested extension.
Sections Cited
Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R % 05.05.2025
This hearing has been done through hybrid mode.
The present petition has been filed by the Petitioner under Article 226 of the Constitution of India inter alia, challenging the impugned order dated 16th August, 2024 (hereinafter ‘impugned order’) passed by the Respondent under Section 73 of the Central Goods And Services Tax Act, 2017 (hereinafter ‘CGST Act’). Vide the impugned order demands to the tune of Rs. 52,89,575/- has been raised against the Petitioner. The allegations relate to certain reconciliation in the returns filed by the Petitioner for the period April, 2019 to March, 2020. 3. It is submitted on behalf of the Petitioner that though the Petitioner – Mrs. Harshana Gulati is the proprietor, the business was being run by her husband on a daily basis and he had passed away on 23rd June, 2021. 4. The Show Cause Notice was received in respect of the period 2019- This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 22:16:32
2020 in 2024 and some time was needed for reconciling the records. Accordingly, a communication was issued by the Petitioner on 18th June, 2024 seeking further time to file a reply. The same was not granted and the impugned order dated 16th August, 2024 has been passed.
In the extenuating circumstances which have been explained in the writ as the Petitioner’s husband appears to have passed away during COVID-19, this Court is of the opinion that some time can be granted to the Petitioner to place a detailed reply on merits to the Show Cause Notice.
Accordingly, the impugned order is set aside. The Petitioner is granted the liberty to file a reply by 15th June, 2025. 7. A personal hearing shall be granted to the Petitioner and the notice for the same shall be sent on the following email addresses: ●Divyapulani653@gmail.com ●Adv.varunkatiyar@gmail.com
After hearing the Petitioner, a fresh reasoned order considering the stand of the Petitioner shall be passed by the Adjudicating Authority.
All rights and remedies of the Petitioner in respect of the Adjudicating Authority’s order are left open.
Petition is disposed of in these terms. All pending applications, if any, are also disposed of. PRATHIBA M. SINGH, J. RAJNEESH KUMAR GUPTA, J. MAY 5, 2025 Rahul/Ar. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 22:16:32
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.