Disposed

Pret Study by Janak Fashions Private Limited v. Assistant Commissioner, Division Mcie, Cgst Delhi East Commissionerate

Delhi HC5 May 2025W.P.(C)/5878/2025

Case brief

AI extract

What is this about?

Petition under Article 226 challenged a CGST order confirming Input Tax Credit demand, interest and penalties, alleging denied access to virtual personal hearing. The Court found no reply was filed despite notices and held the Department not at fault. Petition disposed with liberty to appeal within 30 days, with protection from limitation dismissal.

What did the court decide?

Liberty to file statutory appeal under Section 107 CGST Act within 30 days with pre-deposit; appeal not to be dismissed on limitation and to be decided on merits.

Pret Study by Janak Fashions Private Limited Vs Assistant… — GST and Indirect Tax | Delhi HC (2025)

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$~189

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* IN THEHIGH COURTOF DELHIAT NEW DELHI + W.P.(C) 5878/2025

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PRET STUDY BY JANAK FASHIONS PRIVATE LIMITED

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.....Petitioner

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Through: Mr. Salil Arora and Ms. Reeva Chugh Arora, Advocate.

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versus

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ASSISTANT COMMISSIONER, DIVISION MCIE, CGST DELHI EAST COMMISSIONERATE .....Respondent Through: Mr. Vishal Chadha, Sr. Standing Counsel for CGST.

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CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA

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O R D E R % 05.05.2025

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This hearing has been done through hybrid mode.

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The present petition has been filed under Article 226 of the Constitution of India, 1950 seeking to quash order dated 28^th January, 2025 passed by the Respondent-Assistant Commissioner, Division MCIE, CGST Delhi East Commissionerate (hereinafter ‘Department’ ) confirming demand of Input Tax Credit of Rs. 34,92,903/- availed without receipt of goods along with equivalent penalty and appropriate interest.

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The grievance in this case is that the personal hearings were fixed on 13^th , 14^th and 15^th January, 2025. Ld. Counsel for the Petitioner submits that he joined the link on 15^th January, 2025 at 12:00 PM, however, he was not granted access to attend the hearing.

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A perusal of the record would show that there are two show cause notices dated 22nd July, 2022 and 3rd August, 2024 which have been issued. No reply to the Show Cause Notice dated 3rd August, 2024 was filed by the

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Page 1 of 4

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W.P.(C) 5878/2025

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:13:56

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Petitioner even after the notice for personal hearing, which was sent on 8^th January, 2025.

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Further it is also noticed that the said notice of personal hearing provided three dates of hearing i.e., 13^th , 14^th and 15^th January, 2025. The Petitioner sought to join only on 15^th January, 2025 for the purposes of seeking an extension. This can be seen from the email sent by the ld. Counsel of the Petitioner which reads as under:

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Page 2 of 4

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W.P.(C) 5878/2025

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:13:56

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From the above, it is clear that no reply was also filed to the show cause notice even after the alleged access to the personal hearing was not granted. Beyond that, no effort was made by the Petitioner to either file the reply or file the documents physically or otherwise. The order has been passed on 28^th January, 2025 almost two weeks after the date of personal hearing. From the above circumstances it is clear that the Petitioner has not been diligent in filing the reply and attending the hearings.

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A perusal of the order would show that the demand of wrongfully availed Input Tax Credit is confirmed along with interest. Penalty to the tune of Rs. 34,92,903/- has been imposed on the Petitioner in the following terms:

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(i) I confirm the demand of Input Tax Credit of Rs. 34,92,903/- availed/ utilized without receipt of goods by the notice under Section 74(1) of the CGST Act, 2017 read with Section 74(1) of the Delhi GST Act, 2017 and Section 20 of IGST Act, 2017.

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(ii) I confirm the demand of Interest under the provisions of Section 50 of the CGST Act, 2017 and relevant mirror provisions of DGST Act, 2017 and Section 20 of IGST ACT, 2017 and order to recover the same from the noticee on the amount as mentioned at S.No. (i) above.

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(iii) I impose penalty of Rs. 34,92,903/- on the noticee under Section 74 read with Section 122(2)(b) and Section 122 (l)(vii) of CGST Act, 2017 read with mirror provisions of DGST ACT, 201 7 and Section 20 of IGST Act, 2017 for the reason discussed supra and order to recover the same

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(v) I impose Penalty of Rs. 25,000 /- on the director of the company Sh. Ayush Mehra under section 122(3)(d) read with relevant mirror provisions of Delhi GST Act, 2017 and Section 20 of IGST Act 2017 for the reason discussed supra and order to recover the same.

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(vi) I impose Penalty amounting Rs 25,000 on the director of the company Sh. Ayush Mehra under Section 125 of the CGST Act,

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Page 3 of 4

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W.P.(C) 5878/2025

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:13:56

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2017 read with relevant mirror provisions of Delhi GST Act, 2017 and section 20 of IGST Act 2017 for the reason discussed supra and order to recover the same.

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The above order is clearly an appealable order under Section 107 of the Central Goods and Service Tax Act, 2017. Considering the fact that

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(i) The Department has given the show cause notice and the personal hearing notices to the Petitioner; (ii) The Petitioner has not been diligent;

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the Department cannot be held to blame for not giving a proper hearing.

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Under these circumstances, the impugned Order, in the opinion of the Court, does not warrant interference.

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The petition is disposed of with the liberty to the Petitioner to avail its appellate remedies within 30 days along with the pre-deposit. If the same is filed within the time stipulated, the concerned appellate authority shall not dismiss the appeal on the ground of limitation and shall decide the appeal on merits.

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The present petition is disposed of in the above terms. Pending application(s), if any, also stand disposed of.

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PRATHIBA M. SINGH, J.

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RAJNEESH KUMAR GUPTA, J.

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MAY 5, 2025 / nd/Ar.

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Page 4 of 4

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W.P.(C) 5878/2025

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:13:56

Pret Study by Janak Fashions Private Limited v. Assistant Commissioner, Division Mcie, Cgst Delhi East Commissionerate

Case brief

What is this about?

What did the court decide?

Pret Study by Janak Fashions Private Limited v. Assistant Commissioner, Division Mcie, Cgst Delhi East Commissionerate

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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