Genius Electricals And Electronics PVT LTD vs. Additional Commissioner CGST Delhi West & Anr.
Original PDF →Facts
The Petitioner, Genius Electricals and Electronics Pvt Ltd, filed a writ petition challenging an order dated February 5, 2025, passed by the Additional Commissioner, CGST Delhi West. The challenge stemmed from an investigation into wrongful availment of Input Tax Credit (ITC) and non-payment of GST, primarily targeting M/s Sri Ram Industries and M/s MICA Industries Ltd. The Petitioner was implicated as having received invoices to enhance ITC benefits. A tax demand of Rs. 2.8 crores and an equivalent penalty were imposed. The Petitioner contended that its detailed reply was not considered, and personal hearing notices were either dispatched late or received after the scheduled hearing, preventing their attendance. A significant portion of the demand (Rs. 2.51 crores) was related to M/s Grimus Export Pvt., with whom the Petitioner claimed no connection.
Held
The Court held that the Petitioner deserved to be heard before the Adjudicating Authority. The reasoning was based on the Petitioner's submission that its detailed reply was not considered and that there were issues with the timely delivery of personal hearing notices, which prejudiced its ability to attend and present its case. The Court noted that the Petitioner had raised grounds to dispute the demand and liability. Consequently, the demand and penalty imposed upon the Petitioner were set aside. The Petitioner was directed to appear before the Adjudicating Authority with its replies and supporting material. The Adjudicating Authority was instructed to hear the Petitioner and pass a fresh order in accordance with the law within three months. The issue of whether the Petitioner had a connection with M/s Grimus Export Pvt. was implicitly left to be decided in the fresh adjudication.
Key Issues
1. Whether the Petitioner was afforded a proper opportunity of hearing before the Adjudicating Authority, considering the alleged non-consideration of its reply and issues with personal hearing notices? (Question of law and fact, turning on principles of natural justice and procedural fairness). Petitioner's Arguments: The Petitioner argued that its detailed reply was not considered by the Adjudicating Authority. Furthermore, personal hearing notices were either dispatched after the scheduled hearing date or received late, thus preventing the Petitioner from attending and presenting its case. The Petitioner also highlighted that a substantial part of the demand related to M/s Grimus Export Pvt., a company with which it had no connection, and sought an opportunity to be heard on this aspect. Revenue's Arguments: The Revenue contended that the Petitioner made a mistake by sending replies to incorrect authorities (Gurgaon and CGST North) instead of the Adjudicating Authority in CGST West, to whom the proper reply should have been sent. Regarding personal hearing notices, the Revenue stated that dispatch dates showed they were sent after the hearing was held by the Adjudicatory Authority, CGST West.
Sections Cited
Not specified in the judgment
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Cause title — parties, addresses and appearances
O R D E R % 23.04.2025
This hearing has been done through hybrid mode.
The present writ petition has been filed by the Petitioner under Articles 226 and 227 of the Constitution of India challenging, inter alia, the impugned order dated 05th February, 2025 passed by the Additional Commissioner, Central Goods and Services Tax, Delhi West.
The brief facts of the case are that an investigation was commenced against various noticees qua Show Cause Notice dated 17th July, 2020 in respect of wrongful availment of Input Tax Credit (hereinafter “ITC”) and non-payment of Goods and Services Tax (hereinafter “GST”). The investigation was primarily against one M/s Sri Ram Industries and M/s 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 02/07/2025 at 00:17:31
MICA Industries Ltd. wherein it was found that a network had been created by two individuals i.e., Mr. Vinay Gupta and Mr. Vikas Goel to generate fake ITC without supply of any underlying goods. As part of this investigation, the Petitioner was also issued a notice on the ground that the Petitioner was one of the companies which is alleged to have received invoices to enhance the benefit of ITC. On the basis of the said allegations, tax demand to the tune of Rs. 2.8 crores and penalty of equivalent amount has been imposed upon the Petitioner.
It is submitted by Mr. Ruchir Bhatia, ld. Counsel appearing for the Petitioner that the Petitioner Company had sent a detailed reply which has not been considered by the Adjudicating Authority. In addition, the personal hearing notices were also either dispatched after the date of personal hearing or received after the date of said hearing. Hence, the Petitioner could not even attend the personal hearing.
The main stand of the Petitioner is that vide letter dated 06th August, 2020, the Petitioner had informed the department that it had no connection with one M/s Grimus Export Pvt. in respect of which the majority of the demand has been raised i.e., Rs. 2.51 crores out of the total demand of Rs.2.80 crores. Under these circumstances, it is submitted that the Petitioner may be given an opportunity of hearing before the adjudicating authority.
Mr. Srivastava, ld. Counsel appearing for the Department submits that there has been a mistake by the Petitioner in sending the replies to the wrong authority in Gurgaon and thereafter in CGST North. In fact, the matter was being considered by the Adjudicating Authority in the CGST West to whom the proper reply has not been sent by the Petitioner.
In so far as the delivery of personal hearing notice is concerned, a 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 02/07/2025 at 00:17:31
perusal of the hearing notices and the dispatch dates, would show that the same was dispatched after the hearing was held by the Adjudicatory Authority, CGST West. The Petitioner’s replies which have been placed on record show that the Petitioner has raised grounds to dispute the demand and the liability.
In these circumstances, the Petitioner deserves to be heard before the Adjudicating authority. Accordingly, the demand and the penalty qua the Petitioner are set aside.
Let the Petitioner appear before the adjudicating authority along with its replies and all other material which it wishes to rely upon. The Adjudicating Authority shall hear the Petitioner and pass the order in accordance with law within a period of three months.
The writ petition is allowed and disposed of in above terms. All pending applications, if any, are also disposed of. PRATHIBA M. SINGH, J RAJNEESH KUMAR GUPTA, J APRIL 23, 2025/MR/msh 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 02/07/2025 at 00:17:31
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.