Delhi High Court - Orders
Rajesh Saini (Proprietor Of M/S Jmd ... vs Deputy Director, Directorate General ... on 14 July, 2025
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~15
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 478/2025
RAJESH SAINI (PROPRIETOR OF M/S JMD POLYMERS)
.....Petitioner
Through: Mr. Karan Sachdeva, Advocate.
versus
DEPUTY DIRECTOR, DIRECTORATE GENERAL OF GST
INTELLIGENCE, GURUGRAM ZONAL UNIT, GURUGRAM &
ORS. .....Respondents
Through: Mr. Anurag Ojha, SSC with Mr. Dipak
Raj Singh, Advocate for R-1.
Mr. R. Ramachandran, Sr. Standing
Counsel with Mr. Prateek Dhir,
Advocate.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE RAJNEESH KUMAR GUPTA
ORDER
% 14.07.2025
1. This hearing has been done through hybrid mode. CM APPL. 40822/2025 (for delay in filing counter affidavit)
2. This is an application for condonation of delay in filing the present counter affidavit.
3. For the reasons stated in the application, delay of 21 days in filing present the counter affidavit is condoned. Application is disposed of. W.P.(C) 478/2025 & CM APPL. 2226/2025 (for ad-interim stay)
4. The present petition has been filed by the Petitioner under Article 226 and 227 of the Constitution of India, inter alia, assailing the Show Cause Notice bearing no. 491/2024-25 dated 25th July, 2024 (hereinafter, 'impugned SCN') issued by the Respondent No. 1.
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5. A short issue that arises in the present case is under Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (hereinafter 'CGST Act'). The Petitioner's case is that for the Financial Years i.e., 2017-18, 2018-19, two Show Cause Notices dated 28th September, 2023 and 11th December, 2023 were issued by the Delhi Goods and Services Tax Act, 2017 (hereinafter 'DGST Act') raising various demands in respect of Input Tax Credit (hereinafter, 'ITC') availment from non-existent/ cancelled dealers etc. These two Show Cause Notices culminated into two orders dated 27th December, 2023 and 7th March, 2024.
6. The Central Goods and Services Tax Department (hereinafter 'CGST Department', however, issued a Show Cause Notice on 25th July, 2024 for the very same Financial Years. The submissions of the ld. Counsel for the Petitioner is that this action of CGST Department is completely hit by Section 6(2)(b) of the CGST Act.
7. Mr. R. Ramachandran, ld. Sr. Standing Counsel for the Respondents on the other hand submits that the language in Section 6(2)(b) of the CGST Act is that proceedings have to be initiated and, therefore, in the present case, the proceedings of the CGST Department were earlier in point of time. According to Mr. Ramachandran, the availment of ITC by the Petitioner from dealers such as M/s Pragati Traders, M/s Shree Ram Overseas and M/s RP Enterprises had commenced in 2018 itself. Thus, the DGST has to yield to the CGST in this case.
8. Considering the nature of the present matter, the legal issue would have to be decided as to whether the investigation against firms from whom ITC had been availed of by the Petitioner would constitute initiation of proceedings qua the Petitioner, under Section 6(2)(b) of the CGST Act or not.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/07/2025 at 22:18:16
9. Let the DGST Department also appear in the present case to assist the Court.
10. Issue notice. Mr. KG Gopalakrishnan, ld. Sr. Standing Counsel is requested to accept notice in this matter and file written submissions.
11. Let the rejoinder be filed by the Petitioner within six weeks.
12. List on 9th October, 2025. All counsels may file their written submissions on the legal issue, at least one week before the next date of hearing.
PRATHIBA M. SINGH, J.
RAJNEESH KUMAR GUPTA, J.
JULY 14, 2025/nd/ck This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/07/2025 at 22:18:16