Appeal Allowed Despite Delay Due to Unawareness of ITC Demand Order

Case Title: M/s Prince Diamond Jewellers Pvt. Ltd. v. Goods and Service Tax Officer, Delhi
Court: High Court of Delhi
Petition Number: W.P. (C) 4825/2025
Category of Dispute: Input Tax Credit (ITC) – Appeal and Limitation
Date of Judgement: 17 April 2025
Relevant Section(s): Section 107(1), 107(4) of the CGST Act, 2017
Notifications Referred:

• 9/2023 – State Tax dated 22.06.2023

• 56/2023 – Central Tax dated 28.12.2023

• 56/2023 – State Tax dated 11.07.2024

Facts of the Case [Para 2–5]

• The petitioner M/s Prince Diamond Jewellers Pvt. Ltd. challenged an order dated 14.12.2023, whereby a demand of ₹7,88,611/- was raised on account of excess ITC claim.

• The show cause notice (SCN) dated 24.09.2023, which led to the demand, was allegedly never received by the petitioner.

• The petitioner came to know of the impugned order only on 13.03.2025 during a visit to the GST officer’s office in another matter.

• The SCN was supposedly uploaded on the Additional Notices tab of the GST portal, but the petitioner could not furnish any proof of this.

Question(s) in Consideration [Para 6–9]

1. Whether the petitioner should be granted liberty to file an appeal despite the limitation period having elapsed.

2. Whether the absence of prior knowledge of the SCN and demand order is a valid ground for condoning delay.

3. Whether the extension of timelines under various GST notifications impacts the right to appeal.

Observation of Court [Para 10–11]

• The Court took note of the petitioner’s plea that it became aware of the order only in March 2025.

• Though the challenge to the GST notifications extending time limits was not pressed, the Court acknowledged that the nature and quantum of the demand warranted an opportunity for the petitioner to contest it.

• The Court held that Section 107(1) and (4) of the CGST Act allow a total of four months (three months + one month condonable) to file an appeal.

Judgement of the Court [Para 11–13]

• The Court declined to interfere with the impugned demand order.

• However, considering the plea of lack of notice, the Court allowed the petitioner to file an appeal within 30 days from the date of the order.

• It directed that such appeal shall not be dismissed on the ground of limitation and must be heard on merits.

Between Fine Lines (Simplified Summary)

• A jeweller was hit with a GST demand without knowing about the show cause notice.

• When they finally found out about the order, the time to appeal had technically passed.

• The Court allowed them to appeal despite the delay.

• The demand of ₹7.88 lakhs for excess ITC will now be contested on merits.

• This case highlights the importance of ensuring actual communication of GST notices.

Summary of Referred Cases

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