Raks Trade Logistics Pvt. Ltd. Vs Sales Tax Officer (Delhi High Court)
Delhi High Court has directed tax authorities to re-adjudicate a substantial Goods and Services Tax (GST) demand of over Rs. 5.42 crore against M/s Raks Trade Logistics Pvt. Ltd. The court’s decision, issued despite the petitioner’s admitted non-compliance in earlier proceedings, was influenced by a claim of “duplication” in the final demand order displayed on the GST portal. This ruling grants the company a fresh opportunity to present its case, albeit with a penalty for its prior inaction.
The case originated from a show cause notice issued by the Sales Tax Officer on November 20, 2024, alleging that M/s Raks Trade Logistics Pvt. Ltd. had incorrectly availed Input Tax Credit (ITC). The allegations stemmed from a reconciliation of turnovers in GSTR-09, indicating that ITC had been claimed from cancelled dealers, return defaulters, and non-taxpayers. This led to a demand comprising Rs. 2.94 crore in tax, Rs. 2.18 crore in interest, and Rs. 29.64 lakh in penalty.
According to court records, M/s Raks Trade Logistics Pvt. Ltd. demonstrated a significant lack of engagement during the initial adjudication process. Despite receiving a reminder notice and having a date fixed for a personal hearing, the company neither filed a reply to the show cause notice nor appeared for the hearing. This non-cooperation resulted in an ex-parte demand order being passed on February 19, 2025. The company’s challenge to this order was also belated, with the sole justification for the delay being that an employee with access to the GST portal failed to inform the management about the ongoing proceedings.
