The Delhi High Court has declined to interfere with a demand order issued by the GST Department against Pret Study by Janak Fashions Private Limited. The petitioner had challenged the order claiming denial of personal hearing, but the Court observed that the assessee had not exercised due diligence in responding to notices or attending the scheduled hearings.

The division bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta emphasized:

“Considering the fact that (i) the Department has given the show cause notice and the personal hearing notices to the Petitioner; (ii) the Petitioner has not been diligent; the Department cannot be held to blame for not giving a proper hearing.”

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The petitioner sought quashing of the order dated January 28, 2025, which confirmed the wrongful availment of Input Tax Credit (ITC) worth ₹34,92,903 without actual receipt of goods. The order also imposed an equal penalty and directed interest recovery.

The assessee claimed it had joined the hearing link on January 15, 2025, but was denied access. However, the Court found that the Department had offered three dates—13th, 14th, and 15th January—for personal hearing. The petitioner only attempted to join on the last date, and that too merely to seek an extension.

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Two Show Cause Notices (SCNs) were issued on July 22, 2022 and August 3, 2024. The petitioner failed to file a reply to the latter SCN, even after receiving notice of personal hearing dated January 8, 2025.

“No reply was also filed to the show cause notice even after the alleged access to the personal hearing was not granted… Beyond that, no effort was made by the Petitioner to either file the reply or file the documents physically or otherwise,” the Court stated.

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The final demand order included the following directives:

• Confirmation of ITC demand of ₹34,92,903 under Section 74 of the CGST Act and corresponding provisions of DGST and IGST Acts.
• Interest recovery under Section 50 of the CGST Act.
• Penalty of ₹34,92,903 imposed under Sections 74 and 122 of the CGST Act.
• Additional penalty of ₹25,000 each on the company’s director, Ayush Mehra, under Sections 122(3)(d) and 125 of the CGST Act.

The Court held that the order was appealable under Section 107 of the CGST Act and noted that the petitioner had a remedy available, which it had failed to pursue.

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“Under these circumstances, the impugned Order, in the opinion of the Court, does not warrant interference.”

While disposing of the petition, the Court granted liberty to the petitioner to file an appeal within 30 days along with the required pre-deposit. The appellate authority was directed to decide the case on merits if the appeal is filed within time, without rejecting it on limitation grounds.

Case Title: Pret Study by Janak Fashions Private Limited vs Assistant Commissioner, CGST

Case No.: W.P.(C) 5878/2025

For Petitioner: Mr. Salil Arora and Ms. Reeva Chugh Arora

For CGST: Mr. Vishal Chadha, Senior Standing Counsel