Case Law Details
Retrovis Fashion Pvt. Ltd. Vs Sales Tax Officer Class II/Avato (Delhi High Court)
In the case of Retrovis Fashion Pvt. Ltd. vs. Sales Tax Officer Class II, the Delhi High Court overturned a ₹2.33 crore GST demand imposed due to non-receipt of a Show Cause Notice (SCN) and issues with accessing the GST portal. The demand was confirmed by the Adjudicating Authority under Section 73 of the CGST and DGST Acts, following an SCN dated December 27, 2023. Retrovis Fashion contended that they did not receive the SCN because their authorized signatory, who also managed the GST portal, passed away on November 16, 2020, and the company’s GST registration was canceled thereafter. The company ceased operations on April 1, 2019, and could not access the portal or receive notifications sent through it. The High Court noted these circumstances and directed that the impugned order be set aside. The case was remanded to the Adjudicating Authority for reconsideration, allowing the petitioner to respond to the SCN within two weeks. The Court emphasized the need for a fair hearing and a reasoned order, given the exceptional circumstances surrounding the non-receipt of the SCN.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Issue notice.
2. Learned counsel appearing on behalf of the respondent accepts notice.
3. The petitioner has filed the present petition impugning an order dated 02.04.2024 (hereafter the impugned order) passed by the Adjudicating Authority under Section 73 of the Central Goods and Services Tax Act, 2017 (hereafter CGST Act)/ Delhi Goods and Services Tax Act, 2017 (hereafter DGST Act), whereby the demand of ₹2,33,46,912/- (Two crores Thirty Three lakh Forty Six thousand Nine hundred and Twelve rupees only) including interest and penalty was confirmed.
4. The impugned order was passed pursuant to a Show Cause Notice dated 27.12.2023 (hereafter the SCN). It is the petitioner’s case that it had not received the SCN and therefore, was unable to respond to the same. The reasons explained by the petitioner for non-receipt of the SCN are summarised as under:
i. that the authorized signatory as per GST portal died on 16.11.2020 due to corona virus;
ii. that the GST portal thereafter was un accessible due to cancellation of the registration and death of the authorized signatory who could access the GST portal;
iii. that the petitioner had stopped carrying on business from 01.04.2019;
iv. that the respondent issued show cause notice dated 27.12.2023 and notice for personal hearing through GST portal on 29.02.2024, which was un accessible due to cancellation and death of the authorized signatory etc; and
v. that no notice was served to the petitioner through the physical mode by post
5. The petitioner states that its GST registration was cancelled on 13.01.2020. The petitioner is a closely held company and was mainly run by its director – Mr. Vikas Gupta (who was also the authorised signatory of the company in the records of the GST authorities).
6. It is stated that Mr. Vikas Gupta expired on 16.11.2020 and the petitioner company also ceased to carry on its business thereafter. The learned counsel for the petitioner also submits that the email ID furnished to the GST authorities was that of Mr. Vikas Gupta and there was no occasion to check the same. Since the petitioner stopped its business, it had also not verified its GST portal.
7. Mr. Gupta, learned counsel appearing for the respondent fairly states that the said explanation for non-receipt of the SCN merits consideration.
8. In view of the above, the impugned order is set aside and the matter is remanded to the Adjudicating Authority to consider it afresh.
9. The petitioner may file a response to the SCN within a period of two weeks from date. The Adjudicating Authority shall consider its reply, if any, and pass a reasoned order after affording the petitioner an opportunity of being heard.
10. The present petition is disposed of in the above terms.
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