Ms Blackmelon Advance Technology Company PVT LTD vs. Commissioner Of State Goods And Services Tax Delhi & Anr.
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The Petitioner, M/s Blackmelon Advance Technology Company Pvt. Ltd., filed a writ petition challenging a DRC-07 order dated August 17, 2024, passed by the Sales Tax Officer, Class-II/AVATO, Ward 79: Zone 7, Delhi. This order raised a demand of Rs. 1,28,13,505/-. The Petitioner's registration was previously cancelled on June 6, 2022, for not functioning at the given address. Subsequently, a Show Cause Notice (SCN) dated May 21, 2024, was uploaded on the portal for FY 2019-20 under Section 73 of the Delhi Goods and Services Tax Act, 2017. The Petitioner claims this SCN never came to their knowledge, leading to an ex parte order. The Petitioner discovered the order on January 29, 2025, and found the appeal period had expired.
Held
The Court, exercising its jurisdiction under Article 226 of the Constitution of India, held that an opportunity ought to be afforded to the Petitioner to assail the order on merits. While acknowledging that the Petitioner ought to have been more cautious and that their address mentioned in the petition was an old one, the Court noted that a substantial demand had been raised and the Petitioner had not had an opportunity to file a reply or attend a personal hearing. The Court found that the Petitioner's claim for permission to file an appeal was based on not having knowledge of the SCN and subsequent proceedings. Therefore, the Court directed the Petitioner to file an appeal before the Appellate Authority under Section 107 of the Act within 30 days. The Court stipulated that if filed within this period, the appeal shall not be dismissed on the ground of being barred by limitation. The adjudication of the appeal would then take place on merits and in accordance with law. The issue of whether the SCN was properly served or whether the Petitioner was negligent was implicitly set aside for adjudication on merits by the Appellate Authority.
Key Issues
1. Whether the Petitioner was afforded adequate opportunity to respond to the Show Cause Notice (SCN) and participate in the proceedings leading to the DRC-07 order, considering the Petitioner's claim of not receiving the SCN? 2. Whether the Petitioner should be granted permission to file an appeal against the DRC-07 order beyond the prescribed limitation period, given the circumstances? Petitioner's Arguments: The Petitioner argued that the SCN dated May 21, 2024, was never brought to their knowledge, and consequently, they could not file a reply or attend the personal hearing. They discovered the demand order dated August 17, 2024, only on January 29, 2025, when the time limit for filing an appeal had expired. They relied on the fact that the order was passed ex parte due to their lack of knowledge. Respondents' Arguments: The Respondents contended that the Petitioner's allegation that the notice was uploaded in the 'Additional Notices and Orders' tab was incorrect, as the GST portal had been changed as of January 2024. They did not explicitly argue against the Petitioner's claim of non-receipt of the SCN but highlighted the Petitioner's lack of caution and the outdated address mentioned in the petition.
Sections Cited
Section 73, Section 107
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R % 16.04.2025
This hearing has been done through hybrid mode.
The present petition has been filed by the Petitioner– M/s Blackmelon Advance Technology Company Pvt. Ltd. seeking quashing of the DRC-07 order passed by Respondent No. 2– Sales Tax Officer, Class-II/AVATO, Ward 79: Zone 7, Delhi on 17thAugust, 2024 bearing reference number: ZD070824061121O (hereinafter, ‘the Order’). Vide the order, a demand of Rs. 1,28,13,505/- has been raised against the Petitioner.
The case of the Petitioner Firm is that it was earlier registered with the principal place of business at A-1/7, F/F, A Block, Krishna Nagar, East Delhi, Delhi, 110051 since 01st July, 2017. 4. However, a Show Cause Notice was issued upon the Petitioner on 1st September, 2020 by Respondent No. 2 bearing Reference Number: ZA070920001495R for cancellation of registration for the reason that “the 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 18:39:38
firm was not found functioning at the given address as per GSTI Report”.
The same was responded to by the Petitioner. However, subsequently, the order of cancellation of registration bearing Reference Number: ZA070622019908C was issued by Respondent No. 2 on 6th June, 2022 on the ground that the firm is not functioning from Delhi.
Subsequently, a Show Cause Notice (hereinafter, the SCN) dated 21st May, 2024 bearing reference no. ZD070524019705E appears to have been uploaded on the portal by Respondent No. 2 wherein liability has been imposed upon the Petitioner for FY 2019-20 u/s 73 of the Delhi Goods and Services Tax Act, 2017 (hereinafter, the Act).
However, it is submitted on behalf of the Petitioner that the said SCN never came to the knowledge of the Petitioner. In view of the fact that no reply was filed by the Petitioner to the said SCN and the GST portal was also not accessed by the Petitioner, an order has been passed by Respondent No. 2 on 17th August, 2024. The said order records that opportunity for personal hearing, as well as for filing a reply was given to the Petitioner and since no one appeared and no reply was filed, the demand has been raised ex parte.
Ld. counsel for the Petitioner submits that this order came to the knowledge of the Petitioner only on 29th January, 2025 when accidentally, the Petitioner was checking the GST portal for a different purpose. The Petitioner then tried to file an appeal against the order which could not be filed as the time limit for the same had expired.
Ld. counsel for the Respondents submits that the allegation that the notice was uploaded in the ‘Additional Notices and Orders’ tab is incorrect as the portal has been changed as of January, 2024. 10. The Court has heard the parties. Under Section 107 of the Act, the 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 18:39:38
limitation prescribed for challenging an order is three months from the date on which the said decision or order is communicated to the concerned persons.
In the present case, however, a substantial demand has been raised against the Petitioner and for whatever reason, the Petitioner has not had an opportunity to either file a reply or to attend a personal hearing. The Petitioner ought to have been a little more cautious with the proceedings. In fact, the address of the Petitioner which is mentioned in the memo of parties is also the old place in Delhi. However, ld. counsel for the Petitioner submits that the Petitioner has now shifted to Noida.
Since the grounds for seeking permission to file the appeal against the order was that the Petitioner did not have knowledge of the SCN and the subsequent proceedings arising therefrom, this Court, while exercising juri iction under Article 226 of the Constitution of India is of the opinion that an opportunity ought to be afforded to the Petitioner to assail the order on merits.
Accordingly, let the Petitioner file an appeal before the Appellate Authority under Section 107 of the Act within a period of 30 days. If the same is filed within 30 days it shall not be dismissed on the ground of being barred by limitation. The adjudication thereon shall take place on merits and in accordance with law.
The petition is disposed of in these terms. All pending applications, if any, are also disposed of. PRATHIBA M. SINGH, J RAJNEESH KUMAR GUPTA, J APRIL 16, 2025/dj/ss 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 18:39:38
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.