Case Details: Aviral Technology Solutions and Telecom (P.) Ltd. vs. Union of India - [2025] 174 taxmann.com 433 (Delhi)
Judiciary and Counsel Details
- Pratibha M. Singh & Rajneesh Kumar Gupta, JJ.
- Puneet Rai, Sanjay Sharma, Ms Srishti Sharma, Advs. for the Petitioner.
- Vaishali Gupta, Panel Counsel, Prakash Singh Negi, Sidharth Joshi, Advs. for the Respondent.
Facts of the Case
The petitioner, a registered dealer under the Delhi GST Act received a Show Cause Notice under Section 73 for the tax period. The notice proposed a demand on the ground that one of the petitioner’s suppliers had been retrospectively deregistered from the GST portal, thereby disallowing the input tax credit (ITC) claimed by the petitioner. However, the said supplier had separately challenged the retrospective cancellation of its GST registration through a writ petition before the Hon’ble Delhi High Court, and a coordinate bench had already set aside the retrospective effect of such cancellation.
Despite this judicial development, the Sales Tax Officer proceeded to pass a demand order against the petitioner. The petitioner contended that its detailed reply to the Show Cause Notice was not considered and that the impugned order was passed without affording any opportunity of personal hearing. Consequently, the petitioner approached the Hon’ble Delhi High Court by way of writ petition, challenging the legality of the order on grounds of both procedural violation and reliance on an invalidated registration cancellation.
High Court Held
The Hon’ble Delhi High Court held that the impugned demand order was legally untenable on two independent counts. Firstly, the Court found that the order had been passed in breach of the principles of natural justice, as the petitioner had not been granted an opportunity of personal hearing, nor had its reply to the SCN been considered. Secondly, the Court held that the very basis of the demand—the retrospective cancellation of the supplier’s registration—had already been nullified by a coordinate bench of the same Court in earlier proceedings.
As such, the demand could not be sustained. The Court accordingly set aside the impugned order and remanded the matter to the proper officer for de novo adjudication, with a clear direction to allow the petitioner an opportunity to be heard.
List of Cases Reviewed
- MHCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. S.L.P No 4240/2025 (SC), relied on
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