SC Grants Time to File Appeal Despite Delay in Reply to SCN

Case Details: Montage Enterprises Pvt. Ltd. Versus Central Goods and Service Tax, Delhi North (2025) 33 Centax 110 (S.C.) 

Judiciary and Counsel Details

• J.B. PARDIWALA and R. Mahadevan, JJ.
• S/Shri Mukul Rohtagi, Kavin Gulati, Sr. Advs., Abhishek Singh, AOR and Akshat Choudhary, Adv. for the Petitioner.

Facts of the Case

 The Petitioner, being the assessee, filed a Special Leave Petition (SLP) against the order of the High Court. The factual matrix reveals that the Department of Revenue issued a show cause notice (SCN) alleging issuance of bogus invoices to non-existent or non-operational firms in respect of packaging material and laminates, which were in fact diverted to paan masala and tobacco manufacturing units. The assessee sought extension of time to reply to the SCN and, subsequently, requested copies of relied-upon documents and an opportunity for cross-examination. The Department contended that the assessee was already in possession of the requisite information, as these documents were part of other proceedings. The assessee filed its reply only after a personal hearing notice was issued and raised objections regarding the documents and cross-examination. The High Court held that the assessee had sufficient information to respond to the SCN but failed to do so for six months. It further observed that insolvency proceedings were fraudulently initiated against companies from which recoveries were due, and the belated requests for documents and cross-examination were not bona fide. The High Court concluded that the assessee was not diligent, and writ jurisdiction was not attracted; however, the assessee was free to pursue appellate remedies, and the matter was accordingly placed before the Supreme Court. 

High Court Held

The Hon’ble Supreme Court held that the High Court’s findings were justified. The Court noted that, under Section 74 of the CGST Act and Delhi GST Act, the assessee had all requisite information and documents to reply to the SCN in a timely manner, and the belated requests for documents and cross-examination were not genuine. The Supreme Court granted an extension of time to the assessee to prefer appeal, initially for 30 days, further extended by two months, and clarified that all contentions available to the parties may be raised before the Appellate Authority. 

List of Cases Reviewed

• Montage Enterprises (P.) Ltd. v. Central Goods and Services Tax Delhi North — (2025) 30 Centax 277 / [2025] 174 taxmann.com 266 (Delhi) — SLP Disposed [Para 5]