Salim Ahmad vs. Delhi State Goods And Service Tax & Anr.
Original PDF →Facts
The petitioner, Salim Ahmad, approached the Delhi High Court seeking to quash a Show Cause Notice (SCN) dated 16 October 2024 issued by the Delhi State Goods and Service Tax & Anr. The SCN proposed the cancellation of the petitioner's GST registration for the reason "Others." It alluded to a letter received from the Anti Evasion Wing, CGST Delhi North, dated 07 October 2024. The petitioner's registration was suspended with effect from 16 October 2024, and they were directed to reply within seven working days. The SCN did not provide specific details of the alleged infraction or when the principal place of business was inspected.
Held
The Court held that the Show Cause Notice (SCN) dated 16 October 2024 was unsustainable. The primary reason for this decision was the vagueness of the SCN, which cited "Others" as the sole ground for proposing the cancellation of the petitioner's GST registration. The Court found that this lacked specificity and failed to provide the petitioner with adequate details of the alleged infraction, thereby violating the principles of natural justice. Although the SCN referred to a letter from the Anti Evasion Wing, the Court noted that this letter also failed to disclose appropriate details, including the date of inspection of the principal place of business. Consequently, the Court was unable to sustain the impugned SCN. The Court allowed the writ petition and quashed the SCN, while granting liberty to the respondents to initiate fresh proceedings in accordance with the law. All rights and contentions of the parties on merits were expressly kept open.
Key Issues
1. Whether the Show Cause Notice dated 16 October 2024, which cites "Others" as the sole reason for proposed cancellation of registration, is sustainable in law, particularly concerning the principles of natural justice and the requirements of Section 29(2) of the CGST Act, 2017, and Rule 21 of the CGST Rules, 2017? The petitioner argued that the SCN was vague and lacked specific grounds for cancellation, failing to apprise them of the alleged infraction. They contended that the reason "Others" was insufficient and did not comply with the principles of natural justice, as it did not provide adequate details for them to respond effectively. The petitioner also pointed out the lack of clarity regarding the inspection of their principal place of business. The respondents argued that the SCN was issued based on information received from the Anti Evasion Wing and that the petitioner was directed to furnish a reply within a stipulated period. They contended that the SCN alluded to supportive documents for case-specific details, implying that sufficient information was available to the petitioner.
Sections Cited
Section 29(2), Rule 21
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R Allowed, subject to all just exceptions. CM APPL. 8192/2025 (Ex.) The application stands disposed of.
The petitioner has approached this Court seeking quashing of the Show Cause Notice [‘SCN’] dated 16 October 2024. That notice reads as follows: - W.P.(C) 1669/2025 “Show Cause Notice for Cancellation of Registration
Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons:
Others
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 22:53:21
Remarks:
AS PER LETTER NO. GEXCOM/AE/FU/4585/2024-AE/33462 DT. 07.10.2024, RCVD FROM ANTI EVASION, CGST DELHI NORTH, O/o THE PR. COMM OF CENTRAL GOODS AND SERVICES TAX, DELHI NORTH, C.R. BUILDING, NEW DELHI.
You are hereby directed to furnish a reply to the notice within seven working days from the date of service of this notice.
If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits.
Please note that your registration stands suspended with effect from 16/10/2024. Kindly refer the supportive document attached for case specific details.”
We fail to understand how the petitioner is required to respond to a SCN which ascribes the reason underlying a proposed decision to cancel to be “Others”. Although, it also alludes to a letter of 07 October 2024 purported to have been received from the Anti Evasion Wing, in the absence of the writ petitioner having been apprised of further details and the alleged infraction, we find ourselves unable to sustain the impugned SCN.
It would also be pertinent to take note of the letter which was received from the Anti Evasion Wing and which also fails to disclose appropriate details of when the principal place of business had been inspected.
Consequently, and for all the aforesaid reasons, we allow the instant writ petition and quash the SCN dated 16 October 2024. We, however, accord liberty to the respondents to draw proceedings afresh and in accordance with law.
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 22:53:21
All rights and contentions of respective parties on merits are kept open.
YASHWANT VARMA, J
HARISH VAIDYANATHAN SHANKAR, J FEBRUARY 11, 2025/RW 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 22:53:21
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.