M/S. Jindal Trading Co. Through Its Proprietor Sh. Suresh Jindal vs. Commissioner, Delhi GST And Anr.
Original PDF →Facts
The petitioner, M/s. Jindal Trading Co., filed a writ petition before the Delhi High Court challenging the suspension of its GST registration. The suspension was initiated by a Show Cause Notice (SCN) dated 05 January 2023, issued by the Commissioner, Delhi GST. The SCN cited "Alert notice no. 18 reg. suspicious purchases" as the reason for potential cancellation of registration. The petitioner sought to set aside this SCN and direct the revocation of the suspension of its GST registration. The court noted that despite the SCN being issued on 05 January 2023, no final order had been passed, and the proceedings remained inconclusive.
Held
The Court held that the continued suspension of the petitioner's GST registration was unjustified due to the prolonged delay in passing a final order on the Show Cause Notice (SCN) issued on 05 January 2023. The Court found the SCN to be legally unsustainable because it was neither reasoned nor did it adequately apprise the petitioner of the material forming the basis for the opinion that the registration was liable for cancellation. The notice was deemed vague, making only a broad allegation of "suspicious purchases" without disclosing particulars of the alleged transactions. Consequently, the Court quashed the impugned SCN dated 05 January 2023. However, the Court left it open for the respondents to initiate fresh proceedings if otherwise permissible in law. All rights and contentions of the parties on merits were kept open.
Key Issues
1. Whether the continued suspension of the petitioner's GST registration is justified, given the lack of a final order on the Show Cause Notice issued on 05 January 2023? 2. Whether the Show Cause Notice dated 05 January 2023, citing "Alert notice no. 18 reg. suspicious purchases," is legally sustainable? Petitioner's arguments: The petitioner contended that the continued suspension of its GST registration was unjustified as no final order had been passed on the SCN issued over a year prior. They also argued that the SCN itself was vague, lacking specific details about the alleged suspicious purchases, and therefore unsustainable. The petitioner sought a writ of mandamus to set aside the SCN and revoke the suspension. Revenue's arguments: The judgment does not record any specific arguments made by the respondents (Commissioner, Delhi GST and others).
Sections Cited
None explicitly mentioned in the provided text, other than general reference to GST registration and Show Cause Notice proceedings.
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Cause title — parties, addresses and appearances
O R D E R %
2024
This writ petition has been preferred seeking the following reliefs:- “a) Issue a writ of mandamus or any other writ, order or direction of like nature, setting aside the Show Cause Notice dated 05.01.2023 for Cancellation of Registration. b) Issue a writ of mandamus or any other writ, order or direction of like nature to the respondents, directing them to revoke the suspension of the GST registration certificate of the Petitioner.”
The petitioner is principally aggrieved by the suspension of its 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 09/10/2024 at 14:50:19
Goods and Service Tax [“GST”] registration which had come into effect pursuant to a Show Cause Notice [“SCN”] dated 05 January 2023. The said notice is extracted hereinbelow:- “Show Cause Notice for Cancellation of Registration Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons:
Alert notice no. 18 reg. suspicious purchases You are hereby directed to furnish a reply to the notice within seven working days from the date of service of this notice. If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits . Please note that your registration stands suspended with effect from 05/01/2023.”
Undisputedly and despite the notice having been issued as far back as on 05 January 2023, no final order has been passed nor have the SCN proceedings been rendered a closure. In view of the aforesaid, we find no justification in the continued suspension of the registration of the writ petitioner.
We additionally note that insofar as the SCN itself is concerned, it merely makes the following allegations:- “Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons:
Alert notice no. 18 reg. suspicious purchases”
The SCN is neither reasoned nor does it apprise the petitioner of the material on the basis of which opinion was formed that the registration was liable to be cancelled. The notice is also clearly vague and merely make a broad and sweeping allegation of “suspicious purchases”. There is thus a conspicuous absence of adequate disclosure of particulars of the so called suspicious transactions and 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 09/10/2024 at 14:50:19
which may have constituted a foundation for the formation of opinion that the registration merited cancellation. The SCN being wholly vague, is consequently rendered unsustainable.
We accordingly, allow the instant writ petition and quash the impugned SCN dated 05 January 2023. We however, leave it open to the respondents to draw proceedings afresh, if otherwise permissible in law.
All rights and contentions of respective parties on merits are kept open. YASHWANT VARMA, J. RAVINDER DUDEJA, J. SEPTEMBER 30, 2024/SK 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 09/10/2024 at 14:50:19
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.