Amit Upadhyay (Proprietor Of M/S. Gayatari Diamonds) vs. Sales Tax Officer Class Ii /Avato, Ward 45, Zone 3, Delhi & Anr.
Facts
The petitioner, Amit Upadhyay, proprietor of M/s. Gayatri Diamonds, challenged an order dated 24.08.2024 passed by the adjudicating authority under Section 73 of the Delhi Goods and Services Tax Act, 2017. This order confirmed a demand of ₹32,234,680, including interest and penalty, for the financial year 2019-20. The demand arose from a Show Cause Notice (SCN) dated 31.05.2024. The petitioner failed to respond to the SCN by the stipulated date of 01.07.2024 and attend the hearing on 05.07.2024 due to personal medical reasons and his Chartered Accountant's family emergency. The demand was based on the retrospective cancellation of registration of some suppliers and the failure of other suppliers to pay taxes on their outward supplies, rendering the petitioner's claimed Input Tax Credit inadmissible.
Held
The Court held that the petitioner should be granted another opportunity to respond to the Show Cause Notice. The reasoning was based on the mitigating circumstances presented by the petitioner, namely his personal illness and the severe illness of his Chartered Accountant's daughter, supported by documentary evidence. The Court found these reasons to be valid for the petitioner's failure to respond to the SCN and attend the hearing. Consequently, the impugned order dated 24.08.2024 was set aside. The petitioner was directed to file a response to the SCN within two weeks from the date of the order, along with supporting documents. The adjudicating authority was then directed to pass a fresh order after affording the petitioner an opportunity of a hearing. The ratio decidendi is that genuine personal and professional hardships, supported by evidence, can be grounds for granting a second opportunity to respond to a show cause notice, even after an adverse order has been passed.
Key Issues
1. Whether the petitioner should be granted another opportunity to respond to the Show Cause Notice, considering his inability to do so due to mitigating personal and professional circumstances? The petitioner argued that he was unable to respond to the SCN and attend the hearing due to his own medical condition, supported by medical records, and a family emergency faced by his Chartered Accountant, also supported by medical records. He contended that these were valid reasons for his non-compliance. The respondents, represented by the Sales Tax Officer and another authority, did not present any arguments against granting an opportunity, as they accepted notice and the court proceeded to pass an order.
Sections Cited
Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R
Issue notice.
Learned counsel for the respondents accepts notice.
The petitioner has filed the present petition, inter-alia, impugning an order dated 24.08.2024, passed by the adjudicating authority under Section 73 of the Delhi Goods and Services Tax Act, 2017 (hereafter DGST Act) pertaining to the financial year 2019-20. In terms of the impugned order, an aggregate demand of ₹32,234,680/ - including interest and penalty has been confirmed against the petitioner.
The impugned order was passed pursuant to a Show Cause Notice
The judgment continues below.
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