Balaji Sales Through Its Proprietor Rajni Gupta vs. Govt Of Nct Of Delhi & Ors. - Delhi High Court, 07 May 2025

Cause title — parties, addresses and appearances

W.P.(C) 1471/2025 Page 1 of 8 $~102 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 7th May, 2025 + W.P.(C) 1471/2025 & CM APPL. 7113/2025 BALAJI SALES THROUGH ITS PROPRIETOR RAJNI GUPTA .....Petitioner Through: Mr. M.A. Ansari, Mr. Tabbassum Firdause & Mr. Imran Ahmad, Advocates, M-9718563000, email- ansariadvocate15@gmail.com versus GOVT OF NCT OF DELHI & ORS. .....Respondents Through: Mr. Anurag Ojha, SSC with Mr. Subham Kumar and Mr. Dipak Raj, Advs. (M- 6200388793). Ms. Vaishali Gupta, Advocate. CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA Prathiba M. Singh, J. (Oral) 1. This hearing has been done through hybrid mode. 2. The present petition has been filed by the Petitioner– Balaji Sales under Article 226 of the Constitution of India challenging the Show Cause Notice dated 14th December, 2023 (hereinafter, the ‘Show Cause Notice’) issued by the Sales Tax Officer Class II/AVATO, Delhi (hereinafter, the ‘Sales Tax Officer’) as also the consequent order dated 20th April, 2024 passed by the Sales Tax Officer. 3. The petition also challenges the vires of Notification No. 56/2023- Signed By:NAMITA DHYANI Signing Date:17.05.2025 14:49:05 Signature Not Verified W.P.(C) 1471/2025 Page 2 of 8 Central Tax dated 28th December, 2023 as also the Notification No. 56/2023-State Tax dated 11th July, 2024 (hereinafter, the ‘impugned notifications’). 4. The validity of the impugned notifications was under consideration before this Court in a batch of petitions with the lead petition being W.P.(C) 16499/2023 titled ‘DJST Traders Pvt. Ltd. vs. Union of India and Ors.’. In the said batch of petitions, on 22nd April, 2025, the parties were heard at length qua the validity of the impugned notifications and accordingly, the following order was passed: “4. Submissions have been heard in part. The broad challenge to both sets of Notifications is on the ground that the proper procedure was not followed prior to the issuance of the same. In terms of Section 168A, prior recommendation of the GST Council is essential for extending deadlines. In respect of Notification no.9, the recommendation was made prior to the issuance of the same. However, insofar as Notification No. 56/2023 (Central Tax) the challenge is that the extension was granted contrary to the mandate under Section 168A of the Central Goods and Services Tax Act, 2017 and ratification was given subsequent to the issuance of the notification. The notification incorrectly states that it was on the recommendation of the GST Council. Insofar as the Notification No. 56 of 2023 (State Tax) is concerned, the challenge is to the effect that the same was issued on 11th July, 2024 after the expiry of the limitation in terms of the Notification No.13 of 2022 (State Tax). 5. In fact, Notification Nos. 09 and 56 of 2023 (Central Tax) were challenged before various other High Courts. The Allahabad Court has upheld the validity of Notification no.9. The Patna High Court has Signed By:NAMITA DHYANI Signing Date:17.05.2025 14:49:05 Signature Not Verified W.P.(C) 1471/2025 Page 3 of 8 upheld the validity of Notification no.56. Whereas, the Guwahati High Court has quashed Notification No. 56 of 2023 (Central Tax). 6. The Telangana High Court while not delving into the vires of the assailed notifications, made certain observations in respect of invalidity of Notification No. 56 of 2023 (Central Tax). This judgment of the Telangana High Court is now presently under consideration by the Supreme Court in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. The Supreme Court vide order dated 21st February, 2025, passed the following order in the said case: “1. The subject matter of challenge before the High Court was to the legality, validity and propriety of the Notification No.13/2022 dated 5-7-2022 & Notification Nos.9 and 56 of 2023 dated 31-3-2023 & 8-12-2023 respectively. 2. However, in the present petition, we are concerned with Notification Nos.9 & 56/2023 dated 31-3-2023 respectively. 3. These Notifications have been issued in the purported exercise of power under Section 168 (A) of the Central Goods and Services Tax Act. 2017 (for short, the "GST Act"). 4. We have heard Dr. S. Muralidhar, the learned Senior counsel appearing for the petitioner. 5. The issue that falls for the consideration of this Court is whether the time limit for adjudication of show cause notice and passing order under Section 73 of the GST Act and SGST Act (Telangana GST Act) for financial year 2019-2020 could have been extended by issuing the Notifications in question under Section 168- A of the GST Act. 6. There are many other issues also arising for consideration in this matter. 7. Dr. Muralidhar pointed out that there is a Signed By:NAMITA DHYANI Signing Date:17.05.2025 14:49:05 Signature Not Verified W.P.(C) 1471/2025 Page 4 of 8 cleavage of opinion amongst different High Courts of the country. 8. Issue notice on the SLP as also on the prayer for interim relief, returnable on 7-3-2025.” 7. In the meantime, the challenges were also pending before the Bombay High Court and the Punjab and Haryana High Court . In the Punjab and Haryana High Court vide order dated 12th March, 2025, all the writ petitions have been disposed of in terms of the interim orders passed therein. The operative portion of the said order reads as under: “65. Almost all the issues, which have been raised before us in these present connected cases and have been noticed hereinabove, are the subject matter of the Hon'ble Supreme Court in the aforesaid SLP. 66. Keeping in view the judicial discipline, we refrain from giving our opinion with respect to the vires of Section 168-A of the Act as well as the notifications issued in purported exercise of power under Section 168-A of the Act which have been challenged, and we direct that all these present connected cases shall be governed by the judgment passed by the Hon'ble Supreme Court and the decision thereto shall be binding on these cases too. 67. Since the matter is pending before the

Hon'ble Supreme Court, the interim order passed in the present cases, would continue to operate and would be governed by the final adjudication by the Supreme Court on the issues in the aforesaid SLP-4240-2025. 68. In view of the aforesaid, all these connected cases are disposed of accordingly along with pending applications, if any.”

The Court has heard ld. Counsels for the parties for a substantial period today. A perusal of the above would show that various High Courts have W.P.(C) 1471/2025 taken a view and the matter is squarely now pending before the Supreme Court.

Apart from the challenge to the notifications itself, various counsels submit that even if the same are upheld, they would still pray for relief for the parties as the Petitioners have been unable to file replies due to several reasons and were unable to avail of personal hearings in most cases. In effect therefore in most cases the adjudication orders are passed ex-parte. Huge demands have been raised and even penalties have been imposed.

10.

Broadly, there are six categories of cases which are pending before this Court. While the issue concerning the validity of the impugned notifications is presently under consideration before the Supreme Court, this Court is of the prima facie view that, depending upon the categories of petitions, orders can be passed affording an opportunity to the Petitioners to place their stand before the adjudicating authority. In some cases, proceedings including appellate remedies may be permitted to be pursued by the Petitioners, without delving into the question of the validity of the said notifications at this stage.

11.

The said categories and proposed reliefs have been broadly put to the parties today. They may seek instructions and revert by tomorrow i.e., 23rd April, 2025.”

Thereafter, on 23rd April, 2025, this Court, having noted that the validity of the impugned notifications is under consideration before the Supreme Court, had disposed of several matters in the said batch of petitions after addressing other factual issues raised in the respective petitions. Additionally, while disposing of the said petitions, this Court clearly observed that the validity of the impugned notifications therein shall be subject to the outcome of the proceedings before the Supreme Court in S.L.P. No. W.P.(C) 1471/2025 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.

However, in cases where the challenge is to the parallel State Notifications, the same have been retained for consideration by this Court. The lead matter in the said batch is W.P.(C) 9214/2024 titled Engineers India Limited v. Union of India &Ors.

In the present case, the submission of the Petitioner, on facts, is that the Petitioner did not have an opportunity to file the reply as the Show Cause Notice was uploaded on the ‘Additional Notices Tab’ of the Goods and Services Tax (‘GST’) portal.

This is denied by the Counsel for the Respondent. He relies on the impugned order which records as under: “Observations and conclusion of the assessing authority : Agreed with SCN amount Specific reasons entered The taxpayer has requested for given the extension vide his reply dated 11.03.2024 but neither any reply/explanation has been received from the taxpayer despite sufficient and repeated opportunities nor taxpayer or his AR appeared for personal hearing, which indicates that the taxpayer has nothing to say in the matter and left no option but to create the demand.”

Perusal of the above stated portion of the impugned order would show that the Petitioner in fact, appeared before the Assessing Authority and filed a communication dated 11th March, 2024, vide which, an extension to file a reply was sought. These facts are not disclosed in the writ petition. Instead, W.P.(C) 1471/2025 the Petitioner has raised the allegation that the impugned order is cryptic.

10.

Further, the office of the Sales Tax Officer sent a reminder notice dated 5th March, 2024 to the Petitioner, stating that the reply to the Show Cause Notice has not been received.

11.

Since the Petitioner has failed to disclose the fact that there was in fact a request filed by the Petitioner seeking extension and the representation is made to the contrary, the petition suffers from concealment of material facts. In view thereof, the petition is dismissed with a cost of Rs. 10,000/- to be paid to the Delhi High Court Bar Association within 2 weeks. The details of the bank account is stated herein below: Name: Delhi High Court Bar Association A/c No: 15530100000478 IFSC Code: UCBA0001553 Bank & Branch: UCO Bank, Delhi High Court

12.

At this stage, ld. Counsel for the Petitioner submits that the Petitioner wishes to withdraw the present writ petition and is willing to avail of the appellate remedy.

13.

The Petitioner is permitted to avail of the appellate remedy, subject to the payment of Rs. 10,000/- as costs, as stated above.

14.

Let the appeal be filed by 10th July, 2025. If it is filed within the said time period, along with the mandatory pre deposit, the appeal shall not be dismissed on the ground of limitation and shall be adjudicated on merits.

15.

Needless to add, any observation by this Court shall not bind the decision of the appellate authority. W.P.(C) 1471/2025 16. The petition is disposed of in said terms. Pending applications, if any, are also disposed of. PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 7, 2025/da/rks (corrected & released on 15th May, 2025)