Facts of the Case:

M/s Fone Zone NXT (Proprietor: Mr. Gaurav Madan) obtained GST registration on 1 July 2017 and engaged in the sale of mobile phones and accessories. The petitioner regularly filed returns and had the GST portal linked to the email address of his Chartered Accountant.

The petitioner later requested suspension of his GST registration. Subsequently, show‑cause notices were issued by the GST department for assessment years starting from 2017‑18, alleging mismatches in Input Tax Credit and cancellations of certain suppliers’ registrations. Despite notices and reminders for personal hearings, the petitioner neither filed replies nor attended hearings, resulting in passage of ex‑parte assessment orders under Section 73 with a demand of ₹2,32,166/‑.

The petitioner challenged these orders and the provisional attachment of his bank accounts via multiple writ petitions before the Delhi High Court.

Issues Involved:

  1. Whether the ex‑parte assessment and provisional bank account attachment orders were valid when the petitioner did not respond to show‑cause notices.
  2. Whether the petitioner could be granted equitable relief on account of alleged non‑communication by his Chartered Accountant. 

Petitioner’s Arguments:

  • The petitioner contended that show‑cause notices were sent to the email of his Chartered Accountant and he did not receive them directly.
  • The petitioner argued that he should not suffer for the Chartered Accountant’s failure to communicate.
  • He expressed willingness to deposit 50% of the disputed demand and sought equitable relief including fresh hearings or revocation of the orders. 

Respondent’s Arguments:

  • The Revenue maintained that the GST notices were served as per statute and linked to the email provided on the GST portal.
  • It was argued that the petitioner was responsible for monitoring statutory communications and had ample opportunity to respond.
  • The respondents opposed relief, stressing that procedural defaults cannot be cured by equity or payment offers.

Court Order / Findings:

The Delhi High Court dismissed the writ petitions for lack of merit. It observed that:

  • The petitioner was aware that the GST portal communications were linked to the Chartered Accountant’s email address and was obligated to stay vigilant.
  • Blaming the Chartered Accountant for non‑communication, without action against the professional, could not justify interference.
  • The Court distinguished an earlier Division Bench ruling in M/s Walsons Services Pvt. Ltd., holding that its facts were materially different and did not justify equitable relief here.
  • The petitioner’s offer to deposit part of the demand did not justify deviation from statutory procedure.

Accordingly, the petitions were dismissed with no indulgence granted. 

Important Clarification / Legal Principles:

  • Taxpayer’s compliance responsibility cannot be delegated wholly to professionals; linking communications to a professional’s email does not absolve the taxpayer of statutory obligations.
  • Equitable relief in GST proceedings may be available in exceptional cases but not where the taxpayer is negligent in responding to statutory notices.
  • Mere willingness to deposit part of the tax demand does not entitle a defaulting taxpayer to avoid statutory consequences.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/67922012026CW8882026_171035.pdf

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