GST SCN issued During Same Period of ill Condition of Directors who Died Later: Delhi HC grants Marketing Co. Fresh Opportunity to Defend Case [Read Order]

In a recent ruling, the Delhi High Court has granted an opportunity to defend the case of a marketing company whose Show Cause notice ( SCN ) under GST ( Goods and Services Tax ) issued during the same period of ill condition of directors who passed away later.

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The petition was filed by Vibhor Marketing Pvt Ltd. to challenge the order which had raised a demand of ₹9,10,792 and argued that the company was not provided a proper opportunity to respond. The basis of the SCN was the non-filing of the annual GSTR-9 return for 2018.

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The Court took into account earlier proceedings in another writ petition filed by the same petitioner, where it had been established that the company’s GST registration was cancelled primarily due to the medical conditions of its two directors. Tragically, one director, Mr. Kailash Chand, passed away on 28th February 2022, and the other, Mr. Rajeev Kaushik, passed away on 8th May 2024.

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Considering these exceptional situations, the High Court had previously ordered the restoration of the company’s GST registration, directing the department to take an empathetic view and allow the company to upload necessary documents and be granted a personal hearing.

In the present matter, the petitioner’s counsel argued that the SCN was uploaded only on the ‘Additional Notices Tab’ of the portal and was not effectively communicated to the company.

While the respondent’s counsel contended that SMS and text notifications are sent when SCNs are uploaded, the Court refrained from delving into this dispute.

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Instead, the Court stated that, considering the deaths and serious illnesses of both directors around the time the SCN was issued, the company deserved an opportunity to present its defense on merits.

Justices Prathiba Singh and Justice Rajneesh Kumar Gupta remanded the proceedings initiated under the SCN back to the adjudicating authority, with clear directions that the petitioner be allowed to file a reply within 30 days.

Importantly, the Court ordered that a personal hearing must be granted, and that notice of this hearing be not only uploaded on the portal but also communicated directly to the petitioner’s counsel, Mr. Puneet Rai, via mobile and email.

The court set aside the impugned order, and the adjudicating authority was instructed to pass a fresh order strictly in accordance with law, after giving the petitioner a proper hearing. The High Court clarified that it had not examined the merits of the case and disposed of the petition along with any pending applications.

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To Read the full text of the Order CLICK HERE

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