Delhi High Court Imposes ₹50K Cost on Trader for Failing to Check GST Portal

Delhi High Court Imposes ₹50K Cost on Trader for Failing to Check GST Portal

Introduction

The Delhi High Court has imposed a cost of ₹50,000 on a trader who failed to appear for a personal hearing and file a reply in response to a GST demand notice. The trader's failure to check the GST portal and participate in the proceedings led to the court's decision.

Factual Background

The petitioner, a sole proprietor, was accused of fraudulently availing inadmissible Input Tax Credit (ITC) amounting to ₹50.33 crores. The petitioner allegedly operated in tandem with two individuals engaged in issuing invoices without actual supply of goods.

Procedural Background

The petitioner failed to appear for a personal hearing and file a reply despite being aware of the investigation. The court noted that some of the noticees had attended the personal hearing, but the petitioner did not participate in the proceedings.

Issues

1. Failure to Check GST Portal: The petitioner failed to check the GST portal and respond to the notices.

2. Callous Conduct: The court held that the petitioner's conduct was callous and could not be condoned.

Contentions of the Parties

Petitioner's Contention: The petitioner claimed that he was not aware of the notices uploaded on the GST portal.

Respondent's Contention: The respondent argued that the petitioner was well aware of the investigation and failed to participate in the proceedings.

Reasoning and Analysis

The bench of Justices Prathiba M. Singh and Renu Bhatnagar held that the petitioner's conduct was callous and could not be condoned. The court noted that the notices for personal hearing and replies to be filed were uploaded on the GST portal, and the petitioner was aware of the investigation. The court emphasized that the petitioner's failure to participate in the proceedings was unacceptable.

Outcome

The Delhi High Court dismissed the petition with a cost of ₹50,000 to be deposited with the Delhi High Court Bar Association within two weeks.

In this case the petitioner was represented by Mr. Rakesh Kumar and Mr. Parveen Kumar Gambhir, Advocates. Meanwhile the respondent was represented by Mr. Sumit K. Batra, Advocate.