Facts of the Case

Mahima Life Sciences Pvt. Ltd. and another petitioner filed a writ petition before the Delhi High Court challenging an Order-in-Original (No. 21/CE/Pr/Commnr./S.P/RTK/2022-23) dated 31.01.2023, passed by the Principal Commissioner, CGST, Rohtak, raising a tax demand against the petitioners.

The respondents raised a preliminary objection that the Delhi High Court lacked territorial jurisdiction to entertain the petition, since the adjudicating authority (Rohtak) was outside Delhi.

The petitioners had, before the Adjudicating Authority, specifically raised the objection that part of the proposed tax demand pertained to a period beyond five years from the date of issuance of the show cause notice and was therefore barred by limitation — but this objection had not been considered by the Adjudicating Authority in passing the impugned order.

The matter was heard and decided by a Division Bench on 08.05.2023.

Issues Involved

  1. Whether the Delhi High Court had territorial jurisdiction to entertain the petition.
  2. Whether the Adjudicating Authority's failure to consider the petitioners' limitation objection (that part of the demand was time-barred) rendered the impugned order unsustainable.

Petitioner's Arguments

  • The petitioners contended that a part of the demand related to a period beyond five years from the issuance of the show cause notice and was therefore barred by limitation, and that the Adjudicating Authority had failed to consider this objection at all in passing the impugned order.

Respondent's Arguments

  • The respondents contended that the Delhi High Court lacked territorial jurisdiction to entertain the petition, since the adjudicating authority and proceedings were centred at Rohtak, outside Delhi.

Court Order / Findings

  • The Court rejected the jurisdictional objection, noting that petitioner no.1's registered office was in New Delhi and that the petitioners had also been called upon to respond to the show cause notice at a Delhi address, so that part of the cause of action had clearly arisen within the Delhi High Court's territorial jurisdiction.
  • On the limitation point, the Court found it undisputed that the petitioners had specifically raised the argument that part of the demand was time-barred, and that this question had not been considered by the Adjudicating Authority.
  • The Court set aside the impugned order and remanded the matter to the Adjudicating Authority solely to decide the limitation question, directing that a fresh order be passed within four weeks.
  • It was expressly clarified that the Court had not expressed any opinion on the merits of the contentions raised by the petitioners, and that the petitioners would remain free to avail further remedies against any fresh order.

Important Clarification

This is a genuine GST dispute, but it was disposed of purely on a procedural ground — the Adjudicating Authority's failure to address a limitation objection — with the Court expressly declining to comment on whether the underlying tax demand itself was valid. The case should not be cited for any substantive view on GST liability; the demand remains to be re-examined by the Adjudicating Authority.

Sections Involved

  • Central Goods and Services Tax Act, 2017 – provisions governing time limits for raising demand under Section 73/74, and adjudication procedure
  • Constitution of India, 1950 – Article 226 and principles of territorial jurisdiction

Decision – In Favour of

The writ petition was allowed only to the extent of remanding the matter for fresh adjudication limited to the limitation question; neither party secured a decision on the substantive tax demand, which remains open before the Adjudicating Authority.

Case Details

  • Court: High Court of Delhi at New Delhi
  • Case No.: W.P.(C) 5560/2023 and CM Nos. 21840/2023 & 21841/2023
  • Coram: Justice Vibhu Bakhru and Justice Amit Mahajan
  • Date: 08.05.2023

Link to Download the Order

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