GST: Delhi HC Remands Case with Costs of Rs. 20,000 on Failure to Respond to SCN
In a recent case, the Delhi High Court remanded the case back to the desired Adjudicating Authority and quashed the GST order, as the taxpayer was not aware of the notice because his chartered accountant had direct access to the GST portal and did not inform the taxpayer of the same. The tax authorities passed their final order without hearing the taxpayer.
The writ petition had been filed by Kamal Rajput in the Delhi High Court under Article 226 and 227 of the Constitution of India, challenging an order passed by the Sales Tax Officer Class II/Avato Ward 48, Zone 3, Delhi on August 20, 2024. The case is related to the financial year 2019-20. Along with the order, the taxpayer also challenged a show cause notice (SCN) dated May 24, 2024, and the validity of two notifications – Notification No. 56/2023-Central Tax dated December 28, 2023 and Notification No. 56/2023-State Tax dated July 11, 2024.
The present case is related to a batch of petitions wherein the same notification was challenged. Among these petitioners, one of the key petitions is W.P.(C) No. 16499/2023 titled DJST Traders Private Limited v. Union of India & Ors. The court claimed that several cases related to the issue have already been decided by the present court; they are either sent back to the relevant authorities for fresh consideration, or the parties are told to use the appeal process. All these cases rely on the decision of the Supreme Court of india, where the court is deciding on a case titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. Where the validity of Notification No. 56/2023-Central Tax in S.L.P. No. 4240/2025 has been challenged.
However, for cases where State GST notifications are challenged, the Delhi High Court has kept some matters pending. The main case for such issues is W.P.(C) 9214/2024 titled Engineers India Limited v. Union of India & Ors.
In the present case, the taxpayer was issued a show cause notice (SCN) on May 24, 2024. However, he did not respond to it. This resulted in the issuance of the impugned order without listening to the taxpayer. On this, the authorised representative of the taxpayer claimed that the Chartered Accountant of the taxpayer had direct access to the GST portal, and he did not inform the taxpayer about the notice and impugned order. Hence, the taxpayer was not aware of the same.
For its final decision, the court cited an earlier case, W.P.(C) 4779/2025 titled ‘Sugandha Enterprises through its Proprietor Devender Kumar Singh V. Commissioner Delhi Goods And Service Tax And Others’, based on similar situations where the assessee did not answer to the SCN, and the court remanded the case to the tax authorities for fresh consideration.
The court noted that in the present case also, the taxpayer was not aware of the SCN, hence could not file a reply to it, which resulted in the issuance of the impugned order without hearing the taxpayer. Therefore, the case deserves to be remanded back to the concerned Adjudicating Authority, as the challenge to the Notifications is pending consideration. The court quashed the impugned order, provided the taxpayer has to make a payment of Rs. 20,000 as costs to be paid to the GST Department. The high court has granted taxpayers time till January 15, 2026, to reply to the SCN. On receiving a reply, the Adjudicating Authority should issue a proper notice to the taxpayer for a personal hearing.
Citation: Kamal Rajput Vs Union of India & Ors. (Delhi High Court); W.P.(C) 17781/2025, CM APPL. 73501/2025; 26/11/2025; 2020-21
