Delay in Challenging ₹550 Crore GST Demand Condoned: Delhi HC Allows Appeal Despite Late Knowledge of Order [Read Order]

The Delhi High Court has permitted the filing of a delayed appeal against ₹550 crore GST demand, accepting the explanation that the petitioner gained knowledge of the order much later due to the cancellation of GST registration.

The Court, while refusing to quash the order directly, has condoned the delay and directed the appellate authority to decide the appeal on merits, without dismissing it on limitation grounds.

The facts is that an investigation was held by the CGST Delhi North Commissionerate against 286 entities allegedly involved in fraudulent availment of Input Tax Credit (ITC) through fictitious invoices generated by M/s Montage Enterprises Pvt. Ltd.

The petitioner, Purshottam Ray, was one of the noticees whose firm, P.R. Traders was alleged to have received bogus invoices from the Montage group entities. Following the investigation, the Joint Commissioner, Adjudication, CGST issued a Show Cause Notice (SCN) dated 30 July 2024, culminating in an Order-in-Original dated 31 January 2025, raising a collective demand exceeding ₹550 crore.

The petitioner contended that his firm’s GST registration had been cancelled on 19 July 2024, and that he was unaware of the final order as it was uploaded only on the GST portal without any personal intimation through email or post.

It was only in August 2025, upon being informed by his buyers about show-cause notices issued to them due to denial of ITC, that he discovered the existence of the impugned order. The petitioner then approached the Court seeking either quashing of the order or permission to file a delayed appeal under Section 107of the CGST Act, 2017.

The Department opposed the plea, pointing out that the petitioner was aware of the SCN and had even sought additional time to file a reply on 5 August 2024, but chose not to respond.

The Court observed that while the petitioner was aware of the proceedings, his explanation for delayed knowledge of the final order appeared bona fide, especially since his registration had already been cancelled and no separate communication was issued.

Justice Prathiba M. Singh, speaking for the Bench also comprising Justice Shail Jain, noted that an identical order concerning M/s Montage Enterprises Pvt. Ltd., the principal entity in the same case had already been relegated to the appellate forum. The Court directed that the petitioner also be granted the same relief.

Accordingly, the Court allowed the petitioner to file an appeal by 15 November 2025, subject to compliance with pre-deposit requirements. The Bench made it clear that if the appeal is filed within the prescribed time, the appellate authority must adjudicate it on merits, without rejecting it on limitation.

In a broader administrative direction, the Court also observed that in complex GST investigations involving hundreds of assessees, multiple writ petitions often arise from a single adjudication order.

To prevent conflicting orders, the Court directed the Registry to incorporate a mandatory field indicating the impugned order’s DIN and date at the time of filing, similar to the system followed in criminal cases linked to the same FIR.

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