Chetan Asrani Vs Sales Tax Officer (Delhi High Court)
Delhi High Court has directed Chetan Asrani to pursue an alternate statutory remedy by filing an appeal against a significant GST tax demand, rather than challenging it through a writ petition. The court’s decision comes after Asrani’s GST registration cancellation was provisionally recalled, contingent on no outstanding dues, which subsequently revealed a previously unknown demand.
The petitioner, Chetan Asrani, faced a demand of approximately Rs. 37.5 lakh, encompassing tax, interest, and penalty, arising from an order dated July 30, 2024. This demand reportedly stemmed from a show cause notice (SCN) dated May 22, 2024, which Asrani claimed was never properly issued to him.
The background to this case involves the retrospective cancellation of Asrani’s GST registration, effective from July 1, 2017, by an order dated July 4, 2023. Asrani had successfully challenged this cancellation in W.P.(C) 9529/2024, leading to a Delhi High Court order on October 25, 2024. That order stipulated that the cancellation order dated July 4, 2023, would stand recalled, provided the authorities verified that “no tax dues remain outstanding and there being no other legal impediment.” The court had then directed this verification to be completed expeditiously.
It was in the process of seeking reactivation of his GST registration that Asrani, in March 2025, received a letter from the tax authorities. This letter, dated March 24, 2025, referred to the High Court’s October 2024 order and informed Asrani of a pending liability of Rs. 37.5 lakh for the financial year 2019-20. The letter stated that this liability arose from an assessment notice (DRC-01) issued on May 22, 2024, followed by a demand order (DRC-07) on July 30, 2024, to which no reply had been received from Asrani. Asrani contended that this communication in March 2025 was his first knowledge of both the SCN and the subsequent demand order.
