Sachin Kumar Jain vs. Sales Tax Officer Class Ii Ward 50 Zone 3 Delhi & Anr.
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The petitioner, Sachin Kumar Jain, is aggrieved by a final order dated August 30, 2024, which confirmed a demand raised under Section 73 of the Central Goods and Services Tax Act, 2017. The petitioner contended that the Show Cause Notice (SCN) preceding the order did not disclose any reasons for the alleged failure to correctly declare tax liability. Furthermore, the petitioner claimed unawareness of the SCN, preventing them from filing a reply. The impugned final order, according to the petitioner, confirmed the demand solely based on the non-submission of a reply, without assigning independent reasons for the allegation of incorrect tax disclosure.
Held
The Court allowed the writ petition and quashed the impugned order dated August 30, 2024. The Court found that the Show Cause Notice (SCN) preceding the impugned order failed to record or disclose any reasons for the respondents' conclusion that the petitioner had failed to correctly declare its tax liability. Furthermore, the impugned final order confirmed the demand solely on the basis of the petitioner's failure to submit a reply, without assigning any independent reasons to support the allegation that the correct tax liability had not been disclosed. The Court noted that the respondents' counsel conceded that the matter should be dealt with afresh. Accordingly, the Court granted liberty to the petitioner to furnish a response to the SCN within two weeks, and directed that the SCN proceedings be disposed of expeditiously and in accordance with law. All rights and contentions of the parties on merits were kept open.
Key Issues
1. Whether the Show Cause Notice (SCN) issued under Section 73 of the CGST Act, 2017, was procedurally flawed for failing to disclose reasons for the alleged incorrect declaration of tax liability. 2. Whether the final order confirming the demand under Section 73 of the CGST Act, 2017, is sustainable when it relies solely on the petitioner's failure to file a reply, without independently assigning reasons for the alleged non-declaration of correct tax liability. Petitioner's Arguments: The petitioner argued that the SCN was deficient as it lacked any basis or reasons for the allegations made. They further contended that the final order was unsustainable because it failed to provide any independent reasoning to support the demand, merely treating the absence of a reply as conclusive evidence of guilt. The petitioner asserted that they were unaware of the SCN, which prevented them from responding. Revenue's Arguments: The respondents, represented by Mr. Rajeev Aggarwal, conceded that the ends of justice would be met by allowing them an opportunity to deal with the SCN afresh, rather than having the matter decided by the Court.
Sections Cited
Section 73
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Cause title — parties, addresses and appearances
O R D E R %
2024 CM APPL. 63572/2024 (Exemption) Allowed, subject to all just exceptions. This application stands disposed of. W.P.(C) 15161/2024 & CM APPL. 63571/2024 (Interim Relief)
The petitioner is aggrieved by the final order dated 30 August 2024 in terms of which a demand raised under Section 73 of the Central Goods and Services Tax Act, 2017 [‘CGST Act’] has come to be confirmed.
As we view the Show Cause Notice [‘SCN’] which preceded the passing of the impugned order, we find that the respondents had alleged that the petitioner had failed to correctly declare its tax liability.
However, that SCN failed to record or disclose any reasons on 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 04/07/2025 at 02:37:39
the basis of which the respondents had come to the aforesaid conclusion. Since the petitioner alleged that they were unaware of the issuance of that notice and were consequently unable to file a reply, the respondents have proceeded to pass the final order which stands impugned herein.
As we read the impugned order, we find that the mere failure on the part of the writ petitioner to submit a reply has been taken as constituting sufficient ground to confirm the demand which had been raised. The final order fails to assign any reasons in support of the allegation that the correct tax liability had not been disclosed.
Upon us rendering the aforesaid tentative conclusions, Mr. Aggarwal, learned counsel representing the respondents, submitted that rather than the matter being retained on the board of this Court, the ends of justice would merit the respondents being accorded an opportunity to deal with the SCN afresh.
We accordingly allow the instant writ petition and quash the impugned order dated 30 August 2024. We accord liberty to the writ petitioner to furnish a response to the SCN within a period of two weeks from today. The said reply may be duly examined and the SCN proceedings disposed of in accordance with law and with due expedition.
All rights and contentions of the respective parties on merits are kept open. YASHWANT VARMA, J. RAVINDER DUDEJA, J. OCTOBER 28, 2024/ib 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 04/07/2025 at 02:37:39
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.