Neelmani Electricals v. The Commissioner of Delhi Goods and Services Tax & Ors

JUDGMENT

Prathiba M. Singh, J.

¶1This hearing has been done through hybrid mode. CM APPL. 78565/2025

¶2By way of this amendment, the Petitioner seeks to challenge the following notifications: ● Notification No. 56/2023-Central Tax dated 28th December, 2023; and ● Notification No. 56/2023-State Tax dated 11th July, 2024 ● Notification No. 9/2023-Central Tax dated 31st March, 2023 ● Notification No. 9/2023-State Tax dated 22nd June, 2023

¶3For the reasons stated in the amendment application, as the writ petition is at the initial stage, the amendment is allowed, leaving open all the objections of the Respondent.

¶4The application is allowed and the amended writ petition is taken on record. W.P.(C) 16944/2025

¶5The Petitioner-Neelmani Electricals, has filed the present Petition under Articles 226/227 of the Constitution of India, inter alia, challenging the show cause notice dated 16th December, 2023 (hereinafter, 'impugned SCN'), as also the impugned order dated 5th April, 2024 passed by the Sales Tax Officer Class II/AVATO, Ward 71, Zone-6, Delhi for the tax period April 2018 to March 2019 (hereinafter, 'impugned order').

¶6Additionally, the present petition also challenges the vires of the following notifications: ● Notification No. 56/2023-Central Tax dated 28th December, 2023; and ● Notification No. 56/2023-State Tax dated 11th July, 2024 ● Notification No. 9/2023-Central Tax dated 31st March, 2023 ● Notification No. 9/2023-State Tax dated 22nd June, 2023 (hereinafter, 'the impugned notifications').

¶7The challenge in the present petition is similar to a batch of petitions wherein, inter alia, the impugned notifications were challenged. W.P.(C) No. 16499/2023 titled DJST Traders Private Limited v. Union of India &Ors was the lead matter in the said batch of petitions. On 22nd April, 2025, the parties were heard at length qua the validity of the impugned notifications and accordingly, the following order was passed: "4. Submissions have been heard in part. The broad challenge to both sets of Notifications is on the ground that the proper procedure was not followed prior to the issuance of the same. In terms of Section 168A, prior recommendation of the GST Council is

essential for extending deadlines. In respect of Notification no.9, the recommendation was made prior to the issuance of the same. However, insofar as Notification No. 56/2023 (Central Tax) the challenge is that the extension was granted contrary to the mandate under Section 168A of the Central Goods and Services Tax Act, 2017 and ratification was given subsequent to the issuance of the notification. The notification incorrectly states that it was on the recommendation of the GST Council. Insofar as the Notification No. 56 of 2023 (State Tax) is concerned, the challenge is to the effect that the same was issued on 11th July, 2024 after the expiry of the limitation in terms of the Notification No.13 of 2022 (State Tax).

¶5In fact, Notification Nos. 09 and 56 of 2023 (Central Tax) were challenged before various other High Courts. The Allahabad Court has upheld the validity of Notification no.9. The Patna High Court has upheld the validity of Notification no.56. Whereas, the Guwahati High Court has quashed Notification No. 56 of 2023 (Central Tax).

¶6The Telangana High Court while not delving into the vires of the assailed notifications, made certain observations in respect of invalidity of Notification No. 56 of 2023 (Central Tax). This judgment of the Telangana High Court is now presently under consideration by the Supreme Court in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax &Ors. The Supreme Court vide order dated 21st February, 2025, passed the following order in the said case: "1. The subject matter of challenge before the High Court was to the legality, validity and propriety of the Notification No.13/2022 dated 5-7-2022 & Notification Nos.9 and 56 of 2023 dated 31-3-2023 & 8-12-2023 respectively.

¶2However, in the present petition, we are

concerned with Notification Nos.9 & 56/2023 dated 31-3-2023 respectively.

¶3These Notifications have been issued in the purported exercise of power under Section 168 (A) of the Central Goods and Services Tax Act. 2017 (for short, the "GST Act").

¶4We have heard Dr. S. Muralidhar, the learned Senior counsel appearing for the petitioner.

¶5The issue that falls for the consideration of this Court is whether the time limit for adjudication of show cause notice and passing order under Section 73 of the GST Act and SGST Act (Telangana GST Act) for financial year 2019-2020 could have been extended by issuing the Notifications in question under Section 168-A of the GST Act.

¶6There are many other issues also arising for consideration in this matter.

¶7Dr. Muralidhar pointed out that there is a cleavage of opinion amongst different High Courts of the country. 8. Issue notice on the SLP as also on the prayer for interim relief, returnable on 7-3-2025."

¶7In the meantime, the challenges were also pending before the Bombay High Court and the Punjab and Haryana High Court. In the Punjab and Haryana High Court vide order dated 12th March, 2025, all the writ petitions have been disposed of in terms of the interim orders passed therein. The operative portion of the said order reads as under: "65. Almost all the issues, which have been raised before us in these present connected cases and have been noticed hereinabove, are the subject matter of the Hon'ble Supreme Court in the aforesaid SLP.

¶66Keeping in view the judicial discipline, we refrain from giving our opinion with respect to the vires of Section 168-A of the Act as well as the notifications issued in purported exercise of power

under Section 168-A of the Act which have been challenged, and we direct that all these present connected cases shall be governed by the judgment passed by the Hon'ble Supreme Court and the decision thereto shall be binding on these cases too.

¶67Since the matter is pending before the Hon'ble Supreme Court, the interim order passed in the present cases, would continue to operate and would be governed by the final adjudication by the Supreme Court on the issues in the aforesaid SLP-4240-2025.

¶68In view of the aforesaid, all these connected cases are disposed of accordingly along with pending applications, if any."

¶8The Court has heard ld. Counsels for the parties for a substantial period today. A perusal of the above would show that various High Courts have taken a view and the matter is squarely now pending before the Supreme Court.

¶9Apart from the challenge to the notifications itself, various counsels submit that even if the same are upheld, they would still pray for relief for the parties as the Petitioners have been unable to file replies due to several reasons and were unable to avail of personal hearings in most cases. In effect therefore in most cases the adjudication orders are passed ex-parte. Huge demands have been raised and even penalties have been imposed.

¶10Broadly, there are six categories of cases which are pending before this Court. While the issue concerning the validity of the impugned notifications is presently under consideration before the Supreme Court, this Court is of the prima facie view that, depending upon the categories of petitions, orders can be passed affording an opportunity to the Petitioners to place their stand before the adjudicating authority. In some cases, proceedings including appellate

remedies may be permitted to be pursued by the Petitioners, without delving into the question of the validity of the said notifications at this stage.

¶11The said categories and proposed reliefs have been broadly put to the parties today. They may seek instructions and revert by tomorrow i.e., 23rd April, 2025."

¶8The abovementioned writ petition and various other writ petitions have been disposed of by this Court on subsequent dates, either remanding the matters or relegating the parties to avail of their appellate remedies, depending upon the factual situation in the respective cases. All such orders are subject to further orders of the Supreme Court in respect of the validity of the Notification No. 56/2023-Central Tax in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax &Ors..

¶9However, in cases where the challenge is to the parallel State Notifications, some of the cases have been retained for consideration by this Court. The lead matter in the said batch is W.P.(C) 9214/2024 titled Engineers India Limited v. Union of India &Ors.

¶10On facts, the impugned SCN was issued to the Petitioner on 16th December, 2023. A reminder notice dated 28th February, 2024 was also issued to the Petitioner. However, no reply has been filed to the impugned SCN, nor has any personal hearing been attended by the Petitioner. Thereafter, the impugned order has been passed, raising the following demands:

¶11Thereafter, on 9th September, 2025 an attachment order in FORM GST DRC-22 was issued, directing debit freeze and provisional attachment of bank accounts of the Petitioner in the following terms:

¶12As stated above, the Petitioner has not filed a reply to the impugned SCN, nor the personal hearing notice has been attended to. It is only when the bank accounts were seized, that the Petitioner chose to raise the challenge in the present petition.

¶13Ld. Counsel for the Petitioner has made an attempt to argue that the impugned SCN and impugned order have been uploaded on the 'Additional Notices Tab' and thereby, the same were not brought to the knowledge of the Petitioner. However, there is no screenshot which has been filed to show that the notice was on the 'Additional Notices Tab' and in any case, after 16th January, 2024, the modification has been made to the portal by the Department. Hence, such contention is not tenable.

¶14The other contention on behalf of the Petitioner is that the Chartered

Accountant, who looks after their accounts, did not bring to the knowledge of the Petitioner, any information about the impugned SCN and the subsequent order.

¶15Be that as it may, since the impugned order has been passed without the Petitioner getting an opportunity to raise objections, the Court is inclined to set aside the impugned order.

¶16This Court in W.P.(C) 4779/2025 titled 'Sugandha Enterprises through its Proprietor Devender Kumar Singh V. Commissioner Delhi Goods And Service Tax And Others', under similar circumstances where no reply was filed to the SCN had remanded the matter in the following terms: "6. On facts, however, the submission of the Petitioner in the present petition is that the Petitioner was not afforded with an opportunity to file a reply to the SCN dated 23rd May, 2024 and the impugned order was passed without affording the Petitioner with an opportunity to be heard. Hence, the impugned order is a non-speaking order and is liable to be set aside on the said ground.

¶7Heard. The Court has considered the submissions made. The Court has perused the records. In this petition, as mentioned above, no reply to the SCN has been filed by the Petitioner. Relevant portion of the impugned order reads as under: And whereas, the taxpayer had neither deposited the proposed demand nor filed their objections/ reply in DRC-06 within the stipulated period of time, therefore, following the Principle of Natural Justice, the taxpayer was granted opportunities of personal hearing for submission of their reply/objections against the proposed demand before passing any adverse order. And whereas, neither the taxpayer filed

objections/reply in DRC 06 nor appeared for personal hearing despite giving sufficient opportunities, therefore, the undersigned is left with no other option but to upheld the demand raised in SCN/DRC 01. DRC 07 is issued accordingly.

¶8This Court is of the opinion that since the Petitioner has not been afforded an opportunity to be heard and the said SCN and the consequent impugned order have been passed without hearing the Petitioner, an opportunity ought to be afforded to the Petitioner to contest the matter on merits.

¶9Accordingly, the impugned order is set aside. The Petitioner is granted 30 days' time to file the reply to SCN. Upon filing of the reply, the Adjudicating Authority shall issue to the Petitioner, a notice for personal hearing. The personal hearing notice shall personal hearing. The personal hearing notice shall be communicated to the Petitioner on the following mobile no. and e-mail address:...."

¶17Under such circumstances, considering the fact that the Petitioner did not get a proper opportunity to be heard and no reply to the impugned SCN has been filed by the Petitioner, the matter deserves to be remanded back to the concerned Adjudicating Authority, as the challenge to the impugned Notifications is pending consideration. However, since the Petitioner approached this Court at such a belated stage, the impugned order is set aside, subject to the following conditions:

(i) Cost of Rs.10,000/- shall be deposited with the Delhi High Court Clerks Welfare Funds. The details of the said amount is as under: Name: Delhi High Court Clerks Association A/c No: 15530100006282 IFSC Code: UCBA0001553

Branch: Delhi High Court Branch Address: Shershah Road Delhi, New Delhi-110001

(ii) 25% of the balance in the following bank accounts of the Petitioner, which are stated to be frozen vide attachment order in FORM GST DRC-22 dated 9th September, 2025 shall be maintained in the said accounts:

Sl. No. Closing Date Final Amount

1.

14.11.2025 9,55,500.80/-

2.

13.11.2025 2,18,217.58/-

3.

14.11.2025 2,52,489.35/-

Subject to the maintaining of 25% balance in each of these bank accounts, the freezing order stands lifted.

¶18The Petitioner is granted time till 31st January, 2026, to file the reply to impugned SCN. Upon filing of the reply, the Adjudicating Authority shall issue to the Petitioner, a notice for personal hearing. The personal hearing notice shall be communicated to the Petitioner on the following mobile no. and e-mail address: ● E-mail Address: advocatejaivardhan@gmail.com ● Mobile No.: 9212395579

¶19The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and a fresh reasoned order with respect to the impugned SCN shall be passed accordingly.

¶20However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by the Adjudicating

Authority shall be subject to the outcome of the decision of the Supreme Court in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax &Ors. and this Court in W.P.(C) 9214/2024 titled Engineers India Limited v. Union of India & Ors.

¶21All rights and remedies of the parties are left open. Access to the GST Portal, shall be provided within one week to the Petitioner to enable uploading of the reply as also access to the notices and related documents.

¶22The petition is disposed of in these terms. All pending applications, if any, are also disposed of.

PRATHIBA M. SINGH JUDGE

SHAIL JAIN JUDGE DECEMBER 12, 2025/kp/ss

* IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 12th December, 2025 Uploaded on: 15th December, 2025 + W.P.(C) 16944/2025 NEELMANI ELECTRICALS .....Petitioner Through: Mr. Jai Vardhan, Mr. Deepanshu Badiwal and Ms. Heeba Ansar, Advs. versus THE COMMISSIONER OF DELHI GOODS AND SERVICES TAX & ORS. .....Respondents Through: Ms. Vaishali Gupta, Panel Counsel (Civil)/GNCTD. CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE SHAIL JAIN