Delhi High Court Sets Aside GST Demand Order Despite Delay In Filing Writ, Cites Denial Of Hearing

The Delhi High Court has recently set aside a GST demand order after finding that the taxpayer was not given an opportunity of hearing, even though the writ petition was filed belatedly

A bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul set aside a GST demand order passed under Section 73 of the Delhi Goods and Services Tax Act, 2017, while imposing costs and granting conditional relief to the petitioner.

Petitioner had challenged an Order-in-Original confirming a tax demand of over Rs. 20 lakh for the financial year 2019–2020, along with consequential recovery proceedings including provisional attachment of its bank account.

It was contended that the show cause notice (SCN) giving rise to the demand had merely been uploaded on the GST portal and did not reflect in the “outstanding tax liability” section. As a result, the petitioner claimed it had no knowledge of the proceedings and could not file a reply or participate in the personal hearing.

The revenue authorities opposed the petition, arguing that the petitioner had approached the court belatedly and had failed to avail the opportunity to respond to the SCN.

The High Court noted that the petitioner had not submitted a reply to the show cause notice and did not get the opportunity for a personal hearing.

“This court is of the considered opinion that the right of the petitioner to be heard is an inalienable right under the principle of natural justice.”

However, the court also noted that the petitioner had filed the writ petition at a belated stage.

In such circumstances, the court set aside the impugned order but directed the petitioner to deposit the entire demand amount with Respondent and further imposes costs of Rs. 50,000.

For Petitioner: Advocate Preet Singh Oberoi

For Respondent: Advocate Urvi Mohan for GNCTD, Advocate Shashank Sharma, Senior Standing Counsel with Malika Kumari