Demand Order Set Aside Due to Directors’ Death and Lack of Opportunity of Hearing

Case Title: Vibhor Marketing Pvt Ltd v. Sales Tax Officer Class II/AVATO, Ward 83, Delhi & Anr.
Court: High Court of Delhi
Petition Number: W.P.(C) 2106/2025 & CM Appl. 9972/2025
Date of Judgement: 17th April, 2025
Category of Dispute: Demand of GST – Non-filing of Annual Return
Relevant Sections: Section 73 & 74, Section 107 CGST Act, 2017; Rule 142 CGST Rules

Facts of the Case (Paras 2–4)

• The petitioner challenged the demand order dated 08.04.2024, raising liability of ₹9,10,792/-, issued due to non-filing of GSTR-9 for FY 2018.

• The order was based on SCN dated 03.12.2023, allegedly uploaded only in the “Additional Notices Tab”, not directly communicated (Para 4).

• Both directors of the petitioner company had suffered serious medical issues and later passed away on 28.02.2022 and 08.05.2024 (Para 3).

• Earlier, in W.P.(C) 4816/2025, the Court had restored the petitioner’s GST registration considering the directors’ ill health (Paras 3, 6–8).

Question(s) in Consideration (Paras 2, 4–5)

• Whether the demand order passed without affording the petitioner proper opportunity of reply and hearing is sustainable in law?

• Whether the SCN uploaded in the “Additional Notices Tab” without proper communication amounts to denial of natural justice, especially given the circumstances of directors’ death?

Observations of the Court (Paras 5–7)

• Since both directors who managed the business had passed away, the petitioner could not effectively reply to the SCN (Para 5).

• Opportunity of defense must be given, following principles of natural justice (Para 5).

• The impugned demand order suffers from procedural infirmity and denial of fair hearing (Paras 6–7).

• Future notices must not only be uploaded on the portal but also be communicated via counsel’s email and mobile (Para 7).

Judgement of the Court (Paras 6–9)

• Impugned order dated 08.04.2024 was set aside.

• Matter remanded to adjudicating authority; petitioner allowed to file reply to SCN within 30 days (Para 6).

• A personal hearing to be mandatorily given, and notices to be sent to petitioner’s counsel by both portal and direct communication (Para 7).

• Court did not go into merits of the demand (Para 8).

Between Fine Lines

• The demand order was struck down as the taxpayer was not given a fair chance to respond.

• Directors’ deaths and illness were key factors for granting relief.

• SCNs only uploaded in “Additional Notices Tab” may not suffice as due communication.

• Authorities must ensure notices are properly served to counsel via email/mobile.

• Matter remanded for fresh adjudication with full opportunity of hearing.

Summary of Referred Cases

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