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Case Summary: M/S Jain Cement Udyog (Through Proprietor Sh. Sanjay
Jain) vs. Central Board of Indirect Taxes and Customs & Anr.
Case No.: W.P.(C)
3373/2024
Court: High
Court of Delhi at New Delhi
Date of Order: April
4, 2024
Summary of the Case: M/S
Jain Cement Udyog filed a writ petition challenging an order dated December 4,
2023, passed under Section 73 of the Central Goods and Services Tax Act, 2017
(CGST Act). The impugned order, which included a tax demand of ₹7,56,66,476.00
along with penalties, was issued after the petitioner allegedly failed to
respond to a show-cause notice dated September 25, 2023. The Department claimed
that despite multiple reminders, the petitioner neither filed a reply nor
appeared for the personal hearing, leading to the order being passed ex-parte.
Submissions by the
Petitioner:
The petitioner argued
that they were unable to respond to the show-cause notice because their GST
registration had been retrospectively canceled with effect from July 26, 2017.
Due to this cancellation, the petitioner could not access the GST portal, which
prevented them from replying to the notice or being aware of the subsequent
proceedings.
Submissions by the
Respondent:
The respondent maintained
that the order was passed after the petitioner failed to provide a reply or
explanation despite multiple reminders and opportunities for a personal
hearing. As per their records, sufficient opportunities were given to the
petitioner before the ex-parte order was issued.
Findings by the Court:
The Delhi High Court
found merit in the petitioner’s argument that they could not respond to the
show-cause notice due to the cancellation of their GST registration. The court
noted that it is an admitted case of the Department that a taxpayer cannot access
the GST portal if their registration is canceled retrospectively. Therefore,
the impugned order, which was passed solely on the ground of non-response,
could not be sustained as it failed to account for the petitioner's inability
to respond.
Decision and Conclusion:
The Delhi High Court set
aside the impugned order dated December 4, 2023, and remitted the matter back
to the Proper Officer for re-adjudication. The court directed the petitioner to
file a reply to the show-cause notice within 30 days. The Proper Officer was
instructed to re-adjudicate the show-cause notice after granting an opportunity
for a personal hearing, and to pass a fresh, reasoned order in accordance with
the law within the period prescribed under Section 75(3) of the CGST Act.
Disclaimer: All the
Information is based on the notification, circular and order issued by the
Govt. authority and judgement delivered by the court or the
authority information is strictly for educational purposes and on the
basis of our best understanding of laws & not binding on anyone.
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