Retrovis Fashion PVT. LTD vs. Sales Tax Officer Class Ii / Avato
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The petitioner, Retrovis Fashion Pvt. Ltd., filed a writ petition challenging an order dated 02.04.2024 passed by the Adjudicating Authority under Section 73 of the CGST Act/DGST Act. This order confirmed a demand of ₹2,33,46,912/- including interest and penalty. The petitioner claims it did not receive the Show Cause Notice (SCN) dated 27.12.2023, nor the notice for personal hearing dated 29.02.2024, both allegedly issued through the GST portal. The petitioner's GST registration was cancelled on 13.01.2020. The authorized signatory and director, Mr. Vikas Gupta, died on 16.11.2020. The petitioner states it ceased business from 01.04.2019 and the GST portal was inaccessible due to the cancellation of registration and the death of the authorized signatory. No notice was served physically.
Held
The Court held that the petitioner's explanation for not receiving the Show Cause Notice (SCN) and the notice for personal hearing, which were allegedly issued through the GST portal, merits consideration. The petitioner's GST registration was cancelled, and its authorized signatory and director, Mr. Vikas Gupta, had passed away, rendering the GST portal inaccessible. The petitioner also claimed to have ceased business operations and that no physical notice was served. The respondent's counsel conceded that these circumstances warranted consideration. Consequently, the impugned order dated 02.04.2024 passed by the Adjudicating Authority was set aside. The matter was remanded to the Adjudicating Authority to consider it afresh. The petitioner was granted two weeks to file a response to the SCN, after which the Adjudicating Authority was directed to pass a reasoned order after providing an opportunity of being heard. The issue of the validity of the demand itself was not decided.
Key Issues
1. Whether the Adjudicating Authority erred in passing the impugned order dated 02.04.2024 without ensuring proper service of the Show Cause Notice dated 27.12.2023 and the notice for personal hearing dated 29.02.2024 on the petitioner, thereby violating principles of natural justice, as contemplated under Section 73 of the Central Goods and Services Tax Act, 2017 and Delhi Goods and Services Tax Act, 2017? Petitioner's arguments: The petitioner contended that it did not receive the SCN and personal hearing notice as they were issued through the GST portal, which was inaccessible. This inaccessibility was due to the cancellation of its GST registration and the death of its authorized signatory, Mr. Vikas Gupta, who was also its director. The petitioner also stated that it had ceased business operations and no physical notice was served. Respondent's arguments: The respondent's counsel fairly stated that the petitioner's explanation for non-receipt of the SCN merits consideration.
Sections Cited
Section 73
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$~1 * IN THE HIGH COURT OF DELHI AT NEW DELHI %
Date of Decision: 30.07.2024 + RETROVIS FASHION PVT. LTD.
.....Petitioner
Through: Mr. Mukesh Chand, Mr. Keshav Rai, Advocates.
versus
SALES TAX OFFICER CLASS II / AVATO .....Respondent Through: Mr. Rajeev Aggarwal, ASC and Mr. Shubham Goel, Advocate.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
HON'BLE MR. JUSTICE SACHIN DATTA VIBHU BAKHRU, J. (Oral)
Issue notice.
Learned counsel appearing on behalf of the respondent accepts notice.
The petitioner has filed the present petition impugning an order dated 02.04.2024 (hereafter the impugned order) passed by the Adjudicating Authority under Section 73 of the Central Goods and Services Tax Act, 2017 (hereafter CGST Act)/ Delhi Goods and Services Tax Act, 2017 (hereafter DGST Act), whereby the demand of ₹2,33,46,912/- (Two crores Thirty Three lakh Forty Six thousand Nine hundred and Twelve rupees only) including interest and penalty was confirmed.
The impugned order was passed pursuant to a Show Cause Notice dated 27.12.2023 (hereafter the SCN). It is the petitioner’s case that it had not received the SCN and therefore, was unable to respond to the same. The reasons explained by the petitioner for non-receipt of the SCN are W.P.(C) 9034/2024
summarised as under: i. that the authorized signatory as per GST portal died on 16.11.2020 due to corona virus; ii. that the GST portal thereafter was un accessible due to cancellation of the registration and death of the authorized signatory who could access the GST portal; iii. that the petitioner had stopped carrying on business from 01.04.2019; iv. that the respondent issued show cause notice dated 27.12.2023 and notice for personal hearing through GST portal on 29.02.2024, which was un accessible due to cancellation and death of the authorized signatory etc; and v. that no notice was served to the petitioner through the physical mode by post
The petitioner states that its GST registration was cancelled on 13.01.2020. The petitioner is a closely held company and was mainly run by its director – Mr. Vikas Gupta (who was also the authorised signatory of the company in the records of the GST authorities).
It is stated that Mr. Vikas Gupta expired on 16.11.2020 and the petitioner company also ceased to carry on its business thereafter. The learned counsel for the petitioner also submits that the email ID furnished to the GST authorities was that of Mr. Vikas Gupta and there was no occasion to check the same. Since the petitioner stopped its business, it had also not verified its GST portal.
Mr. Gupta, learned counsel appearing for the respondent fairly states that the said explanation for non-receipt of the SCN merits consideration.
In view of the above, the impugned order is set aside and the matter is remanded to the Adjudicating Authority to consider it afresh.
The petitioner may file a response to the SCN within a period of two weeks from date. The Adjudicating Authority shall consider its reply, if any, and pass a reasoned order after affording the petitioner an opportunity of being heard.
The present petition is disposed of in the above terms.
VIBHU BAKHRU, J
SACHIN DATTA, J JULY 30, 2024 AT
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.