GST | Assessee Must Be Given Personal Hearing Since SCN Lacked Reasons: Delhi High Court Quashes Demand Against Stock Broker
The Delhi High Court has set aside the demand raised against a stock broker, noting that both the show cause notice as well as the final order were bereft of any reasons, disabling the broker to make effective representation.“It is seen that the SCN actually does not give any reasons…Even the impugned order does not give any reasons,” a division bench of Justices Prathiba M. Singh and...
The Delhi High Court has set aside the demand raised against a stock broker, noting that both the show cause notice as well as the final order were bereft of any reasons, disabling the broker to make effective representation.
“It is seen that the SCN actually does not give any reasons…Even the impugned order does not give any reasons,” a division bench of Justices Prathiba M. Singh and Shail Jain observed.
The Petition was filed by M/s RBC Financial Services Pvt. Ltd., engaged in stock broking and providing banking and financial services since 30 years.
It had challenged the demand of Rs.1,09,404/- raised by the Sales Tax Officer for the financial year 2019-20, following scrutiny under Section 73 of the Delhi Goods and Services Tax 2017.
The Petitioner submitted that the SCN is absolutely vague and does not give any reasons as to why it has been issued.
Significant to note that the SCN merely stated that scrutiny assessment was being out and the Petitioner is required to upload documentary evidence.
Thereafter, final order was passed and the only reason attached with Form DRC-07 (summary of order) was that no reply was filed by the Petitioner.
The Petitioner argued that it is a company and its accountant failed to bring the SCN to its attention, leading to no reply being filed in the matter. In any case, it added, the SCN and demand order were unreasoned.
The High Court agreed with the Petitioner and said,
“Neither the SCN nor the impugned demand would sustain…In response to the SCN, since the reasons are not clear, let the Petitioner appear for a personal hearing before the Delhi GST Department.”
Appearance: Mr. Vineet Bhatia, Adv. for Petitioner; Ms. Vaishali Gupta, Adv. Ms. Subhi Bharadwaj, SPC with Mr. Sahaj Garg & Mr. Soumyadip Chakraborty, Advs. for UoI
Case title: M/s RBC Financial Services Pvt. Ltd. v. UoI
Citation: 2025 LiveLaw (Del) 1563
Case no.: W.P.(C) 17106/2025