Delhi HC Allows Personal Hearing in Rs. 2.38 Cr GST Case after ex-parte order

Larsen And Toubro Limited Vs Commissioner of Delhi Goods And Service Tax And Anr (Delhi High Court)

Delhi High Court has directed the Commissioner of Delhi Goods and Service Tax to accept and re-hear a rectification application filed by Larsen and Toubro Limited (L&T), challenging a GST demand of approximately ₹2.38 crores for the Financial Year 2018-19. The demand stemmed primarily from alleged non-reconciliation between GSTR-01 and GSTR-09 forms, and claims of Input Tax Credit (ITC) from non-compliant dealers. The court’s intervention came after noting that L&T’s initial rectification application was dismissed without a proper hearing.

L&T had approached the High Court under Article 226 of the Constitution, challenging a show cause notice dated December 4, 2023, and the subsequent demand order issued on April 29, 2024, by the Sales Tax Officer. Crucially, the petition also contested the legality of Notification No. 56/2023-Central Tax dated December 28, 2023, and Notification No. 9/2023-Central Tax dated March 31, 2023. These notifications are pivotal as they relate to the extension of deadlines for various GST compliance activities.

The High Court noted that the validity of these impugned notifications was already under extensive judicial scrutiny across various High Courts and, more significantly, was pending before the Supreme Court. The court referenced a batch of matters, with W.P.(C) 16499/2023 titled ‘DJST Traders Pvt. Ltd. vs. Union of India and Ors.’ as the lead case. In previous hearings, arguments centered on whether the proper procedure, specifically the prior recommendation of the GST Council as mandated by Section 168A of the Central Goods and Services Tax Act, 2017, was followed before extending these deadlines.