Ss Enterprises vs. Office Of The Commissioner Central Tax Delhi West And Anr
Original PDF →Facts
The Petitioner, SS Enterprises, filed a writ petition challenging an Order-in-Original dated January 31, 2025, passed by the Additional Commissioner of Central Tax, CGST Delhi West. The impugned order imposed a penalty of Rs. 36,05,299/- on the Petitioner. The Petitioner's primary contention was that it did not receive the hearing notice and was not connected to Ms. Aaarti Kapoor, from whom alleged goods-less invoices were received. The Petitioner was accused of availing Input Tax Credit (ITC) of Rs. 172 Crores through fake firms and invoices. The Petitioner claimed the hearing notice was dispatched late, making it impossible to attend the initial hearings, leaving only one date for representation.
Held
The Court noted that the Petitioner's own averment in the writ petition indicated that the hearing notice was indeed received, and it was in time for the personal hearing on January 21, 2025. Therefore, the Petitioner's claim of not receiving the notice was belied. Regarding the contention that three personal hearings were not given, the Court referred to Section 75(5) of the CGST Act, which stipulates that adjournments shall not be granted more than three times, but does not mandate that three hearings must be given. Since the notice was received and the Petitioner did not avail the hearing, the Court found no merit in raising a grievance against the Department on this ground. The Court acknowledged the Respondent's submission that the impugned order is appealable. Consequently, the Petitioner was directed to file an appeal under Section 107 of the CGST Act to the Appellate Authority. The Petitioner was permitted to file any documents with the appeal and was also granted access to all Relied Upon Documents (RUDs) from the Department within two weeks. If the appeal was filed within 30 days of receiving the RUDs, it would not be dismissed on grounds of limitation and would be adjudicated on merits.
Key Issues
1. Whether the Petitioner was deprived of a fair opportunity to defend itself due to the alleged improper issuance and late receipt of the personal hearing notice, thereby violating principles of natural justice, as argued by the Petitioner? 2. Whether the Respondent's contention that the impugned order is appealable under Section 107 of the CGST Act is valid, as argued by the Respondent? Petitioner's Arguments: The Petitioner argued that the notice for personal hearing was not properly issued and failed to adhere to due process. The notice dated January 9, 2025, was dispatched on January 17, 2025, and received late on January 18, 2025. This left only one hearing date, January 21, 2025, after the initial dates of January 13 and 16, 2025, had lapsed, thus preventing a fair defense. The Petitioner also claimed that three personal hearings were not provided. Respondent's Arguments: The Respondent argued that the impugned order is appealable under Section 107 of the CGST Act.
Sections Cited
Section 75(5), Section 107
AI-generated summary — verify with the full judgment below
$~81 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 01st May, 2025 + SS ENTERPRISES .....Petitioner Through: Ms. Shivani Sethi, Advocate. versus OFFICE OF THE COMMISSIONER CENTRAL TAX DELHI WEST AND ANR .....Respondents Through: Mr. Aakarsh Srivastava, Senior Standing Counsel with Mr. Anand Pandey and Ms. Anugya Gupta, Advocates. CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA Prathiba M. Singh, J. (Oral)
This hearing has been done through hybrid mode. CM APPL. 25947/2025 (for exemption)
Allowed, subject to all just exceptions. Application is disposed of. W.P.(C) 5684/2025 & CM APPL. 25946/2025 (for stay)
The present petition has been filed by the Petitioner – SS Enterprises under Articles 226 and 227 of the Constitution of India, inter alia, assailing the Order-in-Original bearing no. 84/SPP/ADC/CGST/DSC/2024-25 dated 31st January, 2025 (hereinafter, ‘impugned order’) passed by the Respondent No.1 - Additional Commissioner of Central Tax, CGST Delhi West Commissionerate. W.P.(C) 5684/2025 4. Vide the impugned order, a penalty to the tune of Rs. 36,05,299/- has been imposed upon the Petitioner.
The case of the Petitioner is that the hearing notice was not received by the Petitioner. Moreover, the Petitioner submits that it is not connected to Ms. Aaarti Kapoor.
A perusal of the impugned order would show that the Petitioner is alleged to have received the goods-less invoices from two firms, namely M/s. Shivaay Trading and Satyam Associates, which are firms stated to be belonging to Ms. Aaarti Kapoor. The total availment of Input Tax Credit (hereinafter, ‘ITC’) is alleged to be to the tune of Rs. 172 Crores through fake and fraudulent firms and goods-less invoices.
The allegation that the personal hearing notice was not received is belied by the Petitioner’s own averment in the writ petition, which reads as under: “Because the notice for personal hearing was not properly issued and failed to adhere to the due process of law. The notice for personal hearing dated 09.01.2025, was dispatched on 17.01.2025 and was received by the Petitioner only on 18.01.2025, late in the evening. By the time the notice was received, the time granted for first two personal hearings i.e 13.01.2025 and 16.01.2025 had lapsed, leaving the Petitioner with only one final hearing date i.e. 21.01.2025, available for representation. This procedural lapse in serving the personal hearing notice to the Petitioner deprived the Petitioner's ability to defend itself and deprived it of a fair and reasonable opportunity to present its case, thus rendering the entire process leading to issuance of Impugned Order as unfair.”
As per the above averment, the notice was in fact received, well in time for appearance in the personal hearing on 21st January 2025. Further W.P.(C) 5684/2025 submission on behalf of Ms. Shivani Sethi, ld. Counsel appearing for the Petitioner is that three personal hearings have not been given to the Petitioner. In fact, a perusal of Section 75(5) of the Central Goods and Service Tax Act, 2017 (hereinafter, ‘CGST Act’) would show that the said provision merely contemplates that the maximum adjournments shall be given for three times but does not in effect mean that three hearings have to be given. The relevant provision is set out below : “(5) The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing: Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.”
The personal hearing notice having been received by the Petitioner and the Petitioner having not availed of the hearing, cannot now be permitted to raise a grievance in respect thereof, against the Department.
Mr. Aakarsh Srivastava, ld. Sr. Standing Counsel for the Respondents submits that the impugned order is an appealable order.
Accordingly, let the Petitioner file an appeal in respect of impugned order under Section 107 of the CGST Act to the Appellate Authority.
With the appeal, the Petitioner is permitted to file any documents that they wish to place on record.
There is grievance that the Relied-upon documents (`RUDs’) are not with the Petitioner. It is accordingly directed that the Department shall make available to the Petitioner all the Relied Upon documents (hereinafter, ‘RUDs’) within two weeks on the following email address :- W.P.(C) 5684/2025 Email ID : shivani@mpaca.in 14. Upon receiving the RUDs, the Petitioner is permitted to approach the Appellate Authority within 30 days. If the appeal is filed in the time period as specified above, the same shall not be dismissed on the ground of limitation and shall be adjudicated on merits.
The petition is disposed of in these terms. Pending application(s), if any, also stand disposed of. PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 01, 2025/nd/ck
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.