Delhi High Court imposes INR 1 lakh on Assessee for repeatedly missing personal hearings despite due notices

Introduction

The Hon’ble Delhi High Court (“the Court”) imposed costs of INR 1 lakh on the Assessee for failing to attend multiple personal hearings, as a condition for setting aside the original demand order of INR 97.53 lakhs. The Court held the Assessee accountable for disregarding notices and granted an opportunity of being heard for the matter to be decided on merits.

The said decision was given in the case of Ganga Enterprises vs Assistant Commissioner, CGST, Delhi East Commissionerate[1], for the Assessment Year (AY) 2020-21.

Facts

• Mrs. Chakresh Jain, a senior citizen and widow of age more than 75 years owned a sole proprietor firm by the name M/s. Ganga Enterprises (“Assessee”/ “Petitioner”). The Assessee had a dealership agreement with M/s. Hindustan Petroleum Corporation Limited for supply of Liquified Petroleum Gas for a period of 10 years.
• Due to certain discrepancies in the GST returns, a notice in Form GST AMT 10 was issued to M/s Ganga Enterprises. However, the Assessee did not respond to the said notice.
• Further, Show Cause Notice (“SCN”) was issued to the Assessee, followed by multiple personal hearing notices, however, the Assessee did not respond to the SCN nor attend the personal hearings.
• Impugned Order-in-Original (“the Order”)was passed raising a demand of INR 97.53 lakhs along with penalty of INR 9.80 lakhs. The Assessee filed a writ petition challenging the Order.

Petitioner’s Contention

• The Assessee challenged the Order on the grounds that the sole proprietor of the firm was a senior citizen suffering from an ‘acute kidney’ condition which incapacitated her from furnishing a reply or participating in the proceedings.
• Hence, the petitioner claimed that the Order was passed without her participation and therefore, a fresh opportunity be granted to be heard.
• The validity of the Order is contingent upon the validity of notification no. 9/2023² & notification no. 56/2023³ issued u/s 168A of the Act – which extend the time limit for passing orders u/s 73(10) of the CGST Act 2017 (“the Act”).
• The Assessee contended that the issue of validity of these notifications is currently pending before the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors⁴.

Judgements, Notifications and Petitions referred

• Notification No. 9/2023- Central Tax dated 31^st March 2023²
• Notification No. 56/2023- Central Tax dated 28^th December 2023³
• Special Leave Petition (S.L.P.) M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax &Ors⁴
• DJST Traders Private Limited v. Union of India &Ors⁵
• Sugandha Enterprises (Proprietor Devender Kumar Singh) V. Commissioner Delhi GST and Others⁶

Issues raised before the High Court

1. Whether the Assessee qualifies for being granted a fresh hearing opportunity, despite multiple missed hearings earlier on account of proprietor’s serious medical condition?

• Whether Notifications (no. 9/2023² & 56/2023³) extending the due date for issuing orders remain legally sustainable, considering divergent High Court decisions and a related petition pending before the Supreme Court?

Decision of the High Court

1. Whether the Assessee qualifies for being granted a fresh hearing opportunity, despite multiple missed hearings earlier on account of proprietor’s serious medical condition?
2. The Court, referring to the case of Sugandha Enterprises through its Proprietor Devender Kumar Singh V. Commissioner Delhi GST and Others⁶,andconsidering the principle of natural justice as well as the medical reason of the proprietor, opined that matter deserves to be heard on merits.
3. At the same time, as the notices were duly served and repeated opportunities of personal hearing were provided, the Court held that a conditional order shall be passed,subject to payment of INR 1 lakh by the Assessee as costs to Delhi High Court Bar Association.
4. The Court further held that the access to the GST portal be granted to the Assessee for replying to the order along with attaching the receipt of deposit of costs.
5. Post receiving the reply, the Assessee shall be given the notice of personal hearing, and accordingly a reasoned order shall be passed as per the Act.

• Whether Notifications (no. 9/2023² and 56/2023³) extending the due date for issuing orders remain legally sustainable, considering divergent High Court decisions and a related petition pending before the Supreme Court?
• The challenge in the present petition was similar to the lead petition in DJST Traders Private Limited v. Union of India &Ors⁵, wherein the Court refrained from giving an opinion with respect to the validity of these Notifications and opined that all the present connected cases shall be governed by the judgment to be passed by the Hon’ble Supreme Court in the case M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax &Ors⁴
• Therefore, in the present case as well, the writ petition challenging the above-mentioned notifications was disposed off subject to further order of the Supreme Court.

Conclusion

The Hon’ble Delhi High Court reinforced the principle of natural justice by granting the Assessee a fresh opportunity of being heard, despite multiple earlier instances of non-appearance. At the same time, the Court imposed costs of INR 1 lakh on the Assessee, signalling that repeated disregard of statutory notices will not be condoned.

Further, with respect to the challenge onthe validity of the notifications (no. 9/2023² and 56/2023³) relating to extension of the due date of issuing order by Proper Officer, the Court refrained from expressing any view and clarified that the issue would abide by the outcome of pending proceedings before the Hon’ble Supreme Court.

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[1] [TS-973-HC(DEL)-2025-GST]

2 [Notification No. 9/2023- Central Tax dated 31^st March 2023]

3 [Notification No. 56/2023- Central Tax dated 28^th December 2023]

4 [S.L.P No 4240/2025]

5 [W.P.(C) No. 16499/2023]

6 [W.P.(C) 4779/2025]