Case Name: Alka Enterprises Vs. Union of India & Ors.
Case Number: W.P.(C) 6816/2024 & CM APPLs. 28413-14/2024
Date of Order: 27 May 2024
Court: High Court of Delhi at New Delhi
Summary of the Case:
Alka Enterprises challenged an order dated 08 December 2023, which disposed of a Show Cause Notice (SCN) dated 26 September 2023, leading to a demand of Rs. 12,03,064.80 under the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioner claimed unawareness of the SCN due to illness and old age, and all communications being through the GST portal after their GST registration was canceled. The High Court set aside the impugned order and remitted the matter to the Proper Officer for re-adjudication, granting the petitioner an opportunity to respond.
Facts of the Case:
· SCN Issuance: The petitioner received a Show Cause Notice dated 26 September 2023, proposing a demand of Rs. 12,03,064.80.
· GST Registration Cancellation: The petitioner's GST registration was canceled with effect from 18 June 2021 due to illness and old age.
· Communication Issues: The petitioner claimed they did not receive the SCN as all communications were through the GST portal.
Submissions by the Petitioner:
· Illness and Old Age: The petitioner applied for GST registration cancellation due to illness and old age.
· Lack of Awareness: The petitioner did not receive the SCN as all communications were through the GST portal and was unaware of the proceedings.
Submissions by the Respondent:
· Grounds for SCN: The SCN was issued on grounds of excess claim of Input Tax Credit (ITC), non-reconciliation of information, and ITC claimed from canceled dealers, return defaulters, and tax non-payers.
Court's Findings
· Ex-parte Order: The impugned order was passed ex-parte as the petitioner did not respond to the SCN.
· Opportunity for Hearing: The Proper Officer noted that despite reminders and opportunities for a personal hearing, the petitioner did not respond or appear.
· Necessity for Re-adjudication: Given the petitioner’s lack of awareness due to canceled GST registration and portal communication, the court found it necessary to grant another opportunity for the petitioner to respond.
Decision:
The court set aside the impugned order dated 08 December 2023 and remitted the case to the Proper Officer for re-adjudication. The petitioner was given 30 days to file a reply to the SCN. The Proper Officer was instructed to provide a personal hearing and issue a fresh speaking order in accordance with the law.
Conclusion:
The High Court of Delhi remitted the case to the Proper Officer due to the petitioner’s unawareness caused by their illness, old age, and GST registration cancellation. The court granted the petitioner an opportunity to respond to the SCN, emphasizing the need for procedural fairness and considering unique circumstances affecting a party’s ability to respond. The court clarified that it did not comment on the merits of the contentions of either party.
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