GST Demand of Rs.1.5 crores: Delhi HC directs to  Consider Requests to Adjourn hearing  Considering medical condition [Read Order]

The Delhi High Court held that the act of the proper officer in confirming demand of Rs. 1.5 crores GST on the ground of absence of the assessee in the hearing is not valid, and the bench directed the department  to empathetically consider assessee's request for adjournment of a personal hearing on medical grounds.

 The petitioner, M/s Jai Optical, under Article 226 and 227 of the Constitution of India challenged the impugned order dated 8th January 2025 (‘impugned order’) and impugned show cause notices dated 24th September 2023 and 30th May 2024. The Petitioner has challenged the repeated issuance of show cause notices by the Delhi Goods and Service Tax Department ( ‘Department’) and challenged the impugned order on the ground that despite a specific reply having been placed on record that the Petitioner was suffering from a stroke, the Department proceeded and passed the impugned order. 

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Three show cause notices  were issued. First, in September 2023 which culminated into an order. The same was challenged before a Coordinate Bench of the High Court which ordered re-adjudication. Subsequent to this, a second SCN was issued in May 2024 and a reply to the same was filed by the petitioner, but the demand was dropped. Thereafter, a third SCN came to be issued in respect of which a hearing notice was issued to the petitioner. An adjournment was then sought on behalf of the petitioner firm's proprietor on medical grounds but the department passed the impugned order raising demand.

he matter was remitted to the Proper Officer for re-adjudication. Accordingly, the impugned order dated 29.11.2023 is set aside. The matter is remitted to the Proper Officer for re-adjudication. The petitioner has not filed any reply or appeared for personal hearing.

Proper Officer is directed to intimate to the petitioner details/documents, as maybe required to be furnished by the petitioner. Pursuant to the intimation being given, petitioner shall furnish the requisite explanation and documents. Thereafter, the Proper Officer shall re-adjudicate the Show Cause Notice after giving an opportunity of personal hearing and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75(3) of the Act.

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The Petitioner had sought an adjournment on the ground that Mr. Vikas Garg the Petitioner’s proprietor had suffered a brain stroke and was not in a position for a hearing.  Instead of considering the adjournment request, the Department passed the impugned order on 8th January, 2025 raising a demand of approximately Rs.1.5 crores.

The submission on behalf of the Petitioner is that the Petitioner has always been diligent and has been following up with the Department. The Petitioner has also been filing replies despite this being the position. Counsel submitted that only due to medical grounds, the adjournment was sought and the same was not granted and the impugned order has been passed.Ms. Gupta, Counsel for the Respondent submitted that the second and the third show cause notices are merely in continuation of the first show cause notice. Since the second show cause notice was uploaded on a wrong tab the same was dropped and a third show cause notice was issued.

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Considering the circumstances , the division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta held that “ The medical ground which was stated on 23nd December, 2024 ought to have been considered emphathetically as the same was accompanied with all the documents from Indraprastha Apollo Hospital.  When such requests for adjournment are made on the medical grounds, obviously the Department is expected to consider the same and not proceed to pass orders.”

 When such requests for adjournment are made on the medical grounds, the court directed the Department  to consider the same and not proceed to pass orders.

To Read the full text of the Order CLICK HERE

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