Delhi HC Slams GST Dept for Ex-Parte Order, Reopens SCN, Imposes 25k Cost on petitioner

Devansh Wire and Cables Pvt. Ltd. faced a GST investigation for alleged wrongful availment of ITC amounting to ₹10.70 crore through bogus invoices issued by fictitious firms. Pursuant to this, a Show Cause Notice (SCN) dated 30 July 2021 was issued under Section 74 of the CGST Act, followed by the petitioner’s replies in September 2021 and December 2023. On 1 January 2025, the Joint Commissioner passed an Order-in-Original confirming ITC recovery aggregating to over Rs. 7.99 crore (CGST, SGST, IGST), interest, and equivalent penalties, including a Rs. 50,000 penalty on the Director under Section 122(3). The petitioner challenged the SCN and the order in W.P.(C) 4455/2025, arguing inter alia that consolidated SCNs across multiple financial years are impermissible, Rule 142 requirements were violated, and its replies were not considered.

Parallelly, the Department issued a Provisional Attachment Order on 18 November 2020 under Section 83, which lapsed by statute and was so declared by this Court in November 2023. Immediately thereafter, a fresh provisional attachment order dated 21 November 2023 targeted the petitioner’s immovable property in Jhilmil Industrial Area and two bank accounts. While W.P.(C) 16884/2025 was pending against the fresh attachment, the Department initiated recovery under Section 79 and also issued a communication to the Sub-Registrar on 29 October 2025 to realise Rs. 7,99,26,706 as arrears of land revenue and attached the property.

Core Issue: Whether the petitioner could be permitted to file an appeal against the 1 January 2025 order despite expiry of limitation, and whether the subsequent recovery and attachment proceedings could stand.

HC Held: The Court held that since W.P.(C) 4455/2025 had been filed within the statutory appeal period under Section 107, the petitioner was entitled to benefit of exclusion of time while the matter remained pending before the High Court. Relying on Ambika Traders and Ganpati Polymers (HC & SC orders), the Court confirmed that consolidated SCNs for multiple financial years are legally permissible under Sections 73 and 74, but other objections may be raised before the appellate authority. The petitioner was thus permitted to file a statutory appeal along with the requisite pre-deposit on or before 15 December 2025, and such appeal shall not be dismissed on limitation and must be adjudicated on merits.

Thus, the recovery communications dated 24 October 2025 (bank accounts) and 29 October 2025 (immovable property) were set aside. The provisional attachment order dated 21 November 2023 had already lapsed on completion of one year under Section 83(2), rendering it infructuous and invalid. All attachments were directed to stand lifted, and the GST portal was ordered to be updated accordingly. Both writ petitions were disposed of in these terms.

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