Facts of the Case

The Petitioner, Shri Balaji Enterprises, was engaged in a small business of sale and repair of mobile phones and televisions after obtaining GST registration in 2017. On account of the COVID-19 pandemic, the Petitioner closed the business and applied for cancellation of the GST registration on 22.06.2021, pursuant to which the registration was suspended. Thereafter, the Respondents uploaded a notice only on the GST Portal and proceeded to pass assessment orders for FY 2018-19 and FY 2019-20, raising a demand of approximately Rs. 1.31 crore. The impugned orders, dated 12.03.2024 and 05.08.2024, were admittedly passed without granting the Petitioner an effective opportunity of hearing, and the Petitioner's cancellation application remained pending consideration throughout. The Petitioner, having joined service elsewhere after applying for cancellation, did not monitor the GST Portal and consequently remained unaware of the proceedings until the demand crystallised. The Petitioner approached the High Court of Delhi under Article 226, contending that the entire tax liability had already been discharged, though the payments were not reflected in the Assessing Authority's records.

Issues Involved

  1. Whether assessment orders passed without an effective opportunity of hearing, and while a registration-cancellation application remained pending, could be sustained.
  2. Whether the Petitioner should be relegated to the statutory appellate remedy under the CGST/DGST Act, 2017, despite the pre-deposit condition attached to such an appeal.
  3. Whether the peculiar facts warranted the extraordinary writ jurisdiction of the High Court instead of remitting the Petitioner to the appellate forum.

Petitioner's Arguments

  • The impugned assessment orders were passed without granting any effective opportunity of hearing.
  • The application for cancellation of GST registration, filed in 2021, remained pending and unaddressed by the Department.
  • The entire tax liability had already been discharged, but the payments had not been accounted for by the Assessing Authority.
  • Relegating the Petitioner to the statutory appeal would impose an onerous pre-deposit condition in a case where the demand itself was raised without hearing.

Respondent's Arguments

  • Counsel for GNCTD appeared and did not seriously dispute that the notice culminating in the impugned orders had only been uploaded on the GST Portal.
  • The Respondents did not contest the pendency of the Petitioner's cancellation application on record.
  • No substantive defence was advanced against remanding the matter for a fresh, opportunity-compliant assessment.

Court Order/Findings

  • The Delhi High Court (Kshetarpal and Mahajan, JJ.) found the case to present a "peculiar and unique factual situation" warranting resolution in the interest of justice.
  • The Court held that since the impugned orders were admittedly passed without an effective hearing, and the cancellation application remained pending, the ends of justice would be served by setting aside the orders and affording the Petitioner a genuine opportunity to respond.
  • The impugned orders dated 12.03.2024 and 05.08.2024 were set aside, with liberty reserved to the Assessing Authority to pass fresh orders after granting due opportunity of hearing, to be completed within three months.
  • The Petitioner was directed to appear before the Assessing Authority on a fixed date along with documents and a reply, if any.
  • The Court expressly clarified that the order was passed on the peculiar facts of the case and was not to be treated as a precedent.

Important Clarification

Assessment orders raising a substantial GST demand cannot be sustained where the underlying notice was communicated only through the GST Portal and no effective hearing was granted, particularly where a registration-cancellation application remains pending; however, such relief on peculiar facts does not create a binding precedent for other cases.

Sections Involved

  • Article 226 of the Constitution of India, 1950 — writ jurisdiction invoked.
  • Central Goods and Services Tax Act, 2017 — provisions governing registration, cancellation and assessment.
  • Section 107 of the CGST Act, 2017 — statutory appeal and pre-deposit requirement referenced by the Petitioner.

Decision – In Favour of

The decision is broadly in favour of the Assessee, as the demand-creating assessment orders were set aside for want of an effective hearing. However, this is a procedural rather than a merits victory — the Assessing Authority retains liberty to pass a fresh assessment after hearing the Petitioner, so the ultimate tax liability remains open.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Delhi at New Delhi
  • Case No.: W.P.(C) 4702/2026
  • CNR: Not available
  • Coram: Hon'ble Mr. Justice Anil Kshetarpal and Hon'ble Mr. Justice Amit Mahajan
  • Decision Date: 17 July 2026
  • Disposal Nature: Disposed of; assessment orders set aside and remitted for fresh hearing

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