Facts of the Case

The petitioner, Purshottam Ray, proprietor of M/s P.R. Traders, filed a writ petition challenging the Order-in-Original dated 31.01.2025 passed by the Joint Commissioner, Adjudication, CGST Delhi North, whereby demands aggregating to over ₹550 crore were raised against 286 entities, including the petitioner. The demands arose from an investigation into alleged large-scale GST evasion involving issuance of bogus invoices by M/s Montage Enterprises Private Limited and its group concerns.

The Show Cause Notice dated 30.07.2024 alleged that M/s Montage Enterprises and its related entities issued fake invoices to multiple firms that were either non-existent or non-operational. The petitioner’s firm was alleged to have received invoices from Montage group entities. During search and inspection, the petitioner’s place of business was found to be non-traceable, and summons issued were returned undelivered.

The petitioner’s GST registration was cancelled on 19.07.2024. On 05.08.2024, the petitioner sought time to file a reply to the SCN but ultimately did not file any reply. The Order-in-Original was uploaded on the GST portal on 31.01.2025. The petitioner claimed to have acquired knowledge of the impugned order only in August 2025, after buyers informed him about denial of ITC due to retrospective cancellation of registration.

Issues Involved

Whether the writ petition was maintainable in light of availability of an alternate statutory remedy under Section 107 of the CGST Act, whether principles of natural justice were violated when the petitioner had knowledge of the SCN but failed to file a reply, whether uploading the Order-in-Original on the GST portal constituted valid communication despite cancellation of registration, and whether the petitioner deserved liberty to file a belated statutory appeal.

Petitioner’s Arguments

The petitioner contended that the Order-in-Original was passed without granting a personal hearing and was uploaded only on the GST portal despite cancellation of GST registration. It was argued that no email or alternate mode of intimation was issued, resulting in lack of knowledge of the order. The petitioner submitted that he became aware of the impugned order only in August 2025 and that the statutory period for filing appeal had expired. Reliance was placed on various High Court decisions where similar orders were set aside and matters remanded for fresh adjudication.

Respondent’s Arguments

The Revenue submitted that the petitioner was aware of the SCN and had even sought time to file a reply but chose not to do so. It was argued that there was no violation of principles of natural justice, as the petitioner could have accessed the GST portal and responded to the SCN. The Department also pointed out that in respect of the same impugned Order-in-Original dated 31.01.2025, the Delhi High Court had already relegated the principal noticee, M/s Montage Enterprises Private Limited, to the statutory appellate remedy.

Court Order / Findings

The Delhi High Court observed that the petitioner had knowledge of the Show Cause Notice and had sought adjournment for filing a reply but ultimately failed to file any response. The Court held that the petitioner could not plead violation of natural justice merely because the Order-in-Original was uploaded on the GST portal, especially when the petitioner was already aware of the proceedings.

The Court noted that in an earlier writ petition filed by M/s Montage Enterprises Private Limited challenging the same Order-in-Original dated 31.01.2025, the Court had declined to entertain the writ and relegated the petitioner therein to the statutory appellate remedy. To avoid conflicting rulings on the same impugned order, the Court held that the present petitioner also ought to be relegated to appeal.

However, considering the explanation that the petitioner acquired knowledge of the impugned order only in August 2025 and treating the same as bona fide, the Court granted the petitioner liberty to file a statutory appeal under Section 107 of the CGST Act with protection against limitation.

Important Clarification

The High Court clarified that where an assessee has knowledge of the Show Cause Notice and fails to file a reply, principles of natural justice cannot be invoked to bypass the statutory appellate remedy. At the same time, in appropriate cases, courts may protect assessees against limitation where bona fide lack of knowledge of the final order is demonstrated.

Final Outcome

The writ petition was disposed of. The petitioner was relegated to the statutory appellate remedy under Section 107 of the CGST Act and was permitted to file an appeal against the Order-in-Original dated 31.01.2025 on or before 15.11.2025, along with the requisite pre-deposit, if any. The appellate authority was directed not to dismiss the appeal on the ground of limitation and to adjudicate the same on merits. All pending applications were disposed of accordingly.

Source Link- https://delhihighcourt.nic.in/app/showFileJudgment/75426092025CW151182025_184646.pdf


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