In a significant GST-related ruling, the Delhi High Court has emphasized the importance of providing a fair opportunity of personal hearing, especially when the taxpayer is a senior citizen facing serious medical issues. The court granted relief to a septuagenarian woman who failed to attend personal hearings in connection with a GST demand of ₹1.95 crore raised against her proprietorship firm, while also imposing a cost of ₹1 lakh for granting such relief. This judgment highlights the balance between procedural compliance and humanitarian considerations under GST law.
Background of the GST Dispute
The petitioner in the case is a senior citizen and the sole proprietor of a firm engaged as a dealer of domestic and commercial Liquefied Petroleum Gas under a dealership agreement with Hindustan Petroleum Corporation Limited for a period of ten years. During scrutiny of GST returns filed by the firm, the department identified certain discrepancies and alleged a short payment of tax amounting to ₹97,53,080 for the period from 1 April 2019 to 31 March 2020. Based on these discrepancies, a show cause notice was issued directing the firm to explain the alleged short payment within ten days.
Personal Hearing Notices and Ex Parte Order
To provide the taxpayer an opportunity to present her case, the department issued multiple personal hearing notices dated 30 July 2024, 6 August 2024, and 13 August 2024. However, no reply was filed to the show cause notice, and the proprietor also failed to appear for the scheduled personal hearings. Consequently, the department proceeded to pass an ex parte order confirming the demand of ₹97,53,080 along with a penalty of ₹5,000 and an additional penalty amounting to ₹9,75,308.
Challenge Before the Delhi High Court
Aggrieved by the demand order, the senior citizen approached the Delhi High Court, challenging the order on the ground that she was unable to respond to the notices or attend the personal hearings due to severe health issues. It was submitted before the court that the petitioner had been suffering from an acute kidney-related medical condition since 2022, which significantly affected her ability to comply with the procedural requirements under GST. On this basis, she sought leniency and requested that the matter be reconsidered after granting her an opportunity of being heard.
Observations of the High Court
The Division Bench of Justices Prathiba M. Singh and Shail Jain took note of the medical condition of the petitioner and observed that her health issues prevented her from filing a reply or appearing for the personal hearing. The court held that, considering these circumstances, the matter deserved to be adjudicated on merits rather than being concluded ex parte. At the same time, the court made it clear that procedural discipline under GST cannot be ignored altogether and therefore decided to impose a cost of ₹1,00,000 as a condition for granting another opportunity.
Relief Granted and Key Takeaway
The Delhi High Court directed the department to provide one more opportunity of personal hearing to the petitioner, subject to payment of the imposed cost. This ruling reinforces the principle that while GST authorities are empowered to proceed ex parte in cases of non-compliance, genuine cases involving senior citizens and serious medical conditions deserve a compassionate approach, ensuring that justice is not denied due to procedural lapses alone.
Case Details
| Particulars | Details |
|---|---|
| Case Title | M/s Ganga Enterprises vs. Assistant Commissioner, CGST, Delhi East Commissionerate |
| Case Number | W.P.(C) 16741/2025 |
| Counsel for Petitioner | Mr. Gibran Naushad, Mr. Harsh Singhal, Mr. Suraj Shekhar Singh |
| Counsel for Respondents | Mr. Gibran Naushad, Mr. Harsh Singhal, Mr. Suraj Shekhar Singh |
| Court | Delhi High Court |
This judgment serves as an important GST news update for taxpayers and professionals alike, underlining that the right to personal hearing is a crucial component of natural justice, particularly when exceptional personal circumstances are involved.