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 April 11, 2024, passed by Respondent No. 2, the Sales Tax Officer, which raised a demand of Rs. 54,20,507/-. The Petitioner's registration was initially cancelled on June 6, 2022, due to the firm not functioning at the given address. Subsequently, a Show Cause Notice (SCN) dated December 2, 2023, was uploaded for FY 2018-19 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 demand order. The Petitioner discovered this order on January 29, 2025, and found the appeal period had expired.
Held
The Court held that while the Petitioner ought to have been more cautious regarding GST proceedings, a substantial demand had been raised, and for whatever reason, the Petitioner had not had an opportunity to file a reply or attend a personal hearing. Exercising jurisdiction under Article 226 of the Constitution of India, the Court opined that an opportunity ought to be afforded to the Petitioner to assail the order on merits. Therefore, the Petitioner was directed to file an appeal before the Appellate Authority under Section 107 of the Act within 30 days. The appeal, if filed within this period, was to not be dismissed on the ground of being barred by limitation. The adjudication on the merits of the case was to take place in accordance with law. The Court explicitly stated that the merits of the case had not been examined by it. The ratio decidendi is that in exceptional circumstances, particularly where a substantial demand is raised and there's a lack of knowledge of proceedings, a High Court may grant an opportunity to file a belated appeal to ensure adjudication on merits.
Key Issues
1. Whether the Petitioner was adequately served with the Show Cause Notice dated December 2, 2023, and the subsequent proceedings, particularly in light of the alleged change in the GST portal's notice tab and the Petitioner's claim of not receiving the notice, turning on Section 73 of the Delhi Goods and Services Tax Act, 2017. 2. Whether the Petitioner should be granted an opportunity to file an appeal against the DRC-07 order dated April 11, 2024, despite the expiry of the statutory limitation period, considering the Petitioner's assertion of not having knowledge of the SCN and subsequent demand, under Article 226 of the Constitution of India. Petitioner's Arguments: The Petitioner argued that the SCN dated December 2, 2023, was never brought to their knowledge. They also contended that they discovered the DRC-07 order only on January 29, 2025, after the appeal period had lapsed. They relied on the principle that an opportunity should be given to assail the order on merits when there's a lack of knowledge of proceedings. Respondent's Arguments: The Respondent argued that the allegation of the notice being uploaded in an incorrect tab was incorrect, as the portal had changed as of January 2024. They also implicitly argued for adherence to the statutory limitation period.
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 11thApril, 2024 bearing reference number: ZD0704240278583 (hereinafter, ‘the Order’). Vide the order, a demand of Rs. 54,20,507/- has been raised against the Petitioner.
The case of the Petitioner Firm is that it was earlier registered as having the principal place of business at A-1/7, F/F, A Block, Krishna Nagar, East Delhi, Delhi, 110051 since 01st July, 2017. 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 18:39:39
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 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.
Thereafter, a Show Cause Notice (hereinafter, the SCN) dated 2nd December, 2023 bearing reference no. ZD0712230070821 appears to have been uploaded on the portal by Respondent No. 2 wherein liability has been sought to be imposed upon the Petitioner for FY 2018-19 u/s 73 of the Delhi Goods and Services Tax Act, 2017 (hereinafter, the Act).
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 11th April, 2024 to the effect 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 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 18:39:39
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 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. 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 18:39:39
The merits of the case have not been examined by this Court. 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 18:39:39
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.