Delhi HC Sets Aside GST Demand, Directs Dept to Consider Assessee’s Medical Adjournment Request

The Delhi High Court ruled that it was not appropriate for officials to confirm a demand for Rs 1.5 crores in GST just because the taxpayer did not attend a hearing. The court emphasised that the tax department should take into account the taxpayer’s request to postpone the hearing due to medical reasons.

The applicant, M/s Jai Optical, under Article 226 and 227 of the Constitution of India, contested the impugned order on 8th January 2025 (‘impugned order’) and impugned SCN on 24th September 2023 and 30th May 2024.

The repeated issuance of show cause notices has been contested by the applicant by the Delhi Goods and Services Tax Department, and contested the impugned order based on the thing that even after the particular response has furnished on record that the applicant was suffering from a stroke, the department has moved and passed the impugned order.

3 SCNs were issued. First, in September 2023, which culminated in an order. It was challenged before a Coordinate Bench of the High Court, which ordered re-adjudication. After this, a second Show Cause Notice (SCN) was issued in May 2024, and a response to it was submitted via the applicant, but the demand was declined. Subsequently, a 3 SCN came to be issued, concerning which a hearing notice was issued to the applicant. An adjournment was pursued on behalf of the firm’s proprietor of the applicant on medical grounds, but an impugned order was passed by the department raising a demand.

The case was remitted to the proper officer for re-adjudication. As per tha,t the impugned order on 29.11.2023 is set aside. The case is remitted to the proper officer for re-adjudication. No response was furnished by the applicant, or appear for the personal hearing.

The proper officer is asked to tell the applicant about the details/documents that may be needed to be filed by the applicant. Applicant provides the requisite explanation and documents under the given intimation. After that, the proper officer will readjudicate the SCN post, furnishing the chance of personal hearing, and will pass a fresh speaking order as per the law in the given duration u/s 75(3) of the Act.

The petitioner requested an adjournment because Mr. Vikas Garg, the petitioner’s proprietor, had suffered a brain stroke and was unable to attend the hearing. Instead of considering this request for adjournment, the department issued a contentious order on January 8, 2025, presenting a demand of Rs. 1.5 crores.

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On behalf of the applicant, submissions have been made that the applicant has been diligent and has been complying with the department. The applicant has furnished responses even after witnessing the situation.

The counsel, merely due to medical grounds, an adjournment was asked for and was not granted, and the impugned order has been passed. The respondent’s counsel, Ms Gupta, furnished that the second and the third SCNs are only in continuation of the first SCN. As the second SCN was uploaded on an incorrect tab, it was declined, and a third SCN was furnished.

Acknowledging the situation, the division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta ruled that ” The medical ground which was stated on 23rd December, 2024 ought to have been considered empathetically as the same was accompanied with all the documents from Indraprastha Apollo Hospital. When such requests for adjournment are made on medical grounds, obviously, the Department is expected to consider the same and not proceed to pass orders.” The court asked the department to regard the requests for the adjournment that are made on medical grounds and not proceed to pass orders.