Appellate Authority Must Hear The Appeal Fully On Merits - Delhi
High Court
Summary of
the Case
The Delhi High Court,
in a judgment dated 15 April 2025, granted liberty to M/s Gardgil
Vohra Ventures Pvt. Ltd. to file an appeal under Section 107 of the CGST
Act against a demand order of ₹6,34,204, which was allegedly issued without
proper service of the Show Cause Notice (SCN).
The petitioner claimed
that the SCN was never brought to its knowledge, as it was uploaded
solely under the ‘Additional Notices’ tab on the GST portal—a less
conspicuous area. The department contended that the SCN was uploaded properly
and no reply was filed. The Court, noting a factual dispute on this issue, held
that the appellate remedy should be made available, even if the
statutory time for appeal had expired.
Case Title
and Bench
- Title:
Gardgil Vohra Ventures Pvt. Ltd. v. Sales Tax Officer Class II (AVATO),
Ward 101 & Anr.
- Writ Petition:
W.P.(C) 4683/2025 & CM APPL. 21618/2025
- Date of Order:
15 April 2025
- Court:
High Court of Delhi at New Delhi
Background
of the Case
1. Issuance
of Demand Order On 20 December 2023, the GST
Department raised a demand of ₹6,34,204 against the petitioner company
under the CGST regime. This demand was made through an ex parte adjudication
order, following an alleged failure by the petitioner to respond to a Show
Cause Notice (SCN) dated 27 September 2023.
2. Non-receipt
of SCN The petitioner contended that it never received
the SCN as it was not uploaded in the regular “View Notices and Orders” tab of
the GST portal but only under the “Additional Notices Tab”, which the
petitioner claimed they were unaware of.
3. Evidence
Submitted During the proceedings, the petitioner submitted printouts
of the GST portal, showing the status of notices. These were handed over physically
in court and taken on record.
4. Department’s
Stand The department argued that the SCN was duly
uploaded and that the petitioner failed to reply, justifying the ex
parte demand order. It also referred to the practice of sending SMS alerts,
though no concrete evidence was provided to show such an alert had reached the
petitioner.
Key Legal
Issues
1. Whether
uploading the SCN only under the “Additional Notices Tab” without clear alert
to the taxpayer satisfies the requirement of service under GST law?
2. Can
a taxpayer be deprived of appellate remedy if there exists a factual dispute
over the service of notice?
3. Should
the limitation period for appeal under Section 107 be relaxed in
such cases?
Reference
to Precedent: Maruti Trading Co. Case
The Court noted that a similar
issue had arisen in another case:
W.P.(C) 4270/2025 (Maruti Trading Co. v. Sales Tax Officer Class II),
decided on 4 April 2025. In that case, the Court had held:
“...even though the SCN
may have been uploaded, if it is not properly reasoned or not communicated
effectively, the taxpayer may miss it. Therefore, appellate remedy should not
be denied.”
Quoting directly from the
Maruti Trading Co. order:
“...This Court is of the
opinion that the Petitioner ought to be given a hearing to contest the matter
on merits.”
The Gardgil Vohra
case, being factually and legally similar, was considered fit to receive the same
remedy.
Judgment
and Analysis
The High Court, while
balancing the procedural obligations of the department and the rights of the
taxpayer, ruled as follows:
A. Factual Dispute Exists
There was no
conclusive proof that the SCN was brought to the petitioner's knowledge:
- No email confirmation was shown;
- No SMS record submitted;
- SCN visibility limited to an obscure
tab on the portal.
B. No Reply ≠ No Service
The Court distinguished non-response
due to lack of service from willful neglect. It held:
“...Whether the Show
Cause Notice was duly served upon the Petitioner involves a factual enquiry...”
Hence, the absence of
reply alone did not justify denial of further remedy.
C. Appellate Right
Revived
Given that the time
for appeal had expired, the Court exercised its powers to allow delayed
appeal filing, noting:
“...this Court is
inclined to grant the Petitioner an opportunity to assail the demand on
merits.”
Final
Directions of the Court
1. Right
to Appeal Granted: The petitioner is permitted to file an appeal
under Section 107 of the CGST Act within 30 days from the date of
this order.
2. No
Dismissal on Limitation: If the appeal is filed within 30
days, it shall not be rejected as time-barred.
3. Appeal
to Be Heard on Merits: The Appellate Authority must hear the
appeal fully on merits, after verifying pre-deposit requirements under
Section 107(6).
4. Writ
Petition Disposed of: The petition and all pending
applications were disposed of accordingly.
Conclusion
The Delhi High Court’s
decision in Gardgil Vohra Ventures Pvt. Ltd. v. Sales Tax Officer, Ward 101
upholds the spirit of fair hearing and access to appellate remedies
under GST law. In cases where notice service is contested, the Court
favors substantive justice over procedural rigidity.
This case contributes to
a growing body of jurisprudence emphasizing that tax adjudication cannot be
mechanized, and authorities must ensure effective and meaningful
communication with taxpayers.
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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