M/S. VALLABH TEXTILES v. ADDITIONAL COMMISSIONER CENTRAL TAX GST, DELHI EAST AND ORS

Case snapshot

Sections / provisions: GST statutory provision - Section 74; GST statutory provision - Section 74(10); GST statutory provision - Section 79; GST statutory provision - Section 107; GST statutory provision - Section 138; GST statutory provision - Section 139

Questions before the Court / Tribunal

• Issue and context: The present petition has been filed by the Petitioner - Vallabh Textiles under Article 226 of the Constitution of India inter alia seeking setting aside of the orders dated 20th January, 2025 and 29th January, 2025 and 1st February, 2025 as arbitrary and in violation of the provisions of the CGST Act, 2017 and Article 14, 19(1)(g), 265, 300A of the Constitution of India. Operative disposition: The Petitioner is , accordingly, permitted to approach the Appellate Authority by way of an appeal under Section 107 of the CGST Act within thirty days. If the appeal is filed within the said period, the same shall be considered on merits and shall not be dismissed on the ground of being
• Which factual, statutory and procedural conditions controlled the requested relief?
• How did the forum apply the governing provisions to the evidence and procedural history recorded in this case?

Material facts and procedural background

$~60 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 9th April, 2025 + W.P.(C) 4576/2025 M/S. VALLABH TEXTILES .....Petitioner Through: Mr. Vivek Sarin, Mr. Akash Gupta, Ms. Divyanshi Singh, Mr. Dhruv Dev Gupta & Mr. Satish C. Kaushik, Advocates. versus ADDITIONAL COMMISSIONER CENTRAL TAX GST, DELHI EAST AND ORS .....Respondents Through: Ms. Anushree Narain, Sr. Standing Counsel with Mr. Ankit Kumar, Adv. CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA Prathiba M. Singh, J. (Oral) 1. This hearing has been done through hybrid mode. CM APPL. 21170/2025 (for exemption) 2. Allowed, subject to all just exceptions. Application is disposed of. W.P.(C) 4576/2025 & CM APPLs. 21169/2025 (for directions) 3. The present petition has been filed by the Petitioner - Vallabh Textiles under Article 226 of the Constitution of India inter alia seeking setting aside of the orders dated 20th January, 2025 and 29th January, 2025 and 1st February, 2025 as arbitrary and in violation of the provisions of the CGST Act, 2017 and Article 14, 19(1)(g), 265, 300A of the Constitution of India. 4. First of all, the present petition has been filed challenging the impugned order dated 29 th January, 2025 by which the Adjudicating Authority has confirmed the GST liability of the Petitioner to the tune of Rs. 7,13,05,165/ -

and has imposed an equivalent penalty. Penalties have also been imposed on Petitioner’s Directors. 5. At the outset, Mr. Sarin, ld. Counsel for the Petitioner submits that this is the second round of the litigation by the Petitioner. Earlier, this Show Cause Notice (hereinafter ‘SCN’) dated 29th May, 2024 from which the impugned demand order dated 29th January, 2025 arose was challenged by the Petitioner on the ground that consolidation of investigation for different financial years is not permissible. The said writ petition being W.P.(C) 13855/2024 and the order dated 3rd October, 2024 passed therein, has not been mentioned in the present writ petition. He apologises for the same unconditionally and submits that it was an inadvertent error .

The Court has perused the order dated 3 rd October, 2024 passed in the said writ petition, wherein on the question of consolidation, the Court has disposed of the matter. 6. The second grievance which is now being raised in this petition is that the SCN proceedings continued before the Adjudicating Authority, however, the Petitioner’s right to cross -examine certain third parties was denied vide impugned order dated 20th January, 2025. 7. Ms. Narain, ld. Senior Standing Counsel for the Respondent No.1 (hereinafter ‘Department’) in response submits that the said order is an appealable order under Section 107 and the same contention can be raised even as a ground before the Appellate Authority.

Therefore, she submits that the Petitioner ought to be relegated to the appellate remedy. 8. Heard the parties. The b rief facts of the case are that the Directorate General of Goods and Services Tax Intelligence (hereinafter as ‘ DGGI’) gathered intelligence that M/S. Vallabh Textiles i.e., the Petitioner was acting as a commission agent for selling of third-party goods to various clients in the

local markets. The said sales were being made, according to the Department, on a kaccha ledger and the details of various entities who were the purchasers of the said goods from the Petitioner , was mentioned in the said Ledgers . Thus, as per the Department, there was evasion of GST. 9. A SCN dated 29th May, 2024 contained all the evidence, which was collected during the course of search including the hand -written kaccha ledgers, parchas etc. 10. The Petitioner had challenged the issuance of SCN on the ground that the same was issued as a consolidated notice for multiple years. This writ petition, being W.P.(C) 13855/2024 , was disposed of vide order dated 3rd October, 2024.

Appellant / petitioner / assessee submissions

That in any case would not constitute a jurisdictional challenge warranting the writ petition being entertained against a SCN. 4. Insofar as FY 2017 -18 is concerned, it was the submission of learned counsel for the writ petitioner that the same would not sustain bearing in mind the provisions contained in Section 74(10) of the CGST Act, 2017/DGST Act, 2017. Insofar as that questio n is concerned, we leave it open to the writ petitioner to

16. The rationale behind setting aside an order/judgment on the grounds of non-provision of the right to cross-examine is to safeguard the affected party from being prejudiced due to non-providing of cross examination. Therefore, such reasoning presumes/implies the existence of prejudice. In other words, if the alleging party fails to prove any substantial prejudice caused to it due to such non-provision, it shall not have the inherent right to set aside such an order/judgment. This view has been upheld by the Supreme Court in various judgments including M/s. Telestar Travels Pvt. Ltd. v Special Director Of Enforcement 2013(9) SCC 549. The relevant portion of the said judgment reads as under: “23. That brings us to the third limb of the attack mounted by the appellants against the impugned orders. It was argued by Mr Divan that while holding that Bountiful Ltd. was a paper company and was being controlled and operated from India by the appellants through Shri Sirish Shah, the adjudicating authority had relied upon the statements of Miss Anita Chotrani and Mr Deepak Raut, and a communication received from the Indian High Commission in London. These statements and the report were, according to Mr Divan, inadmissible in evidence as the appellant’s request for an opportunity to cross - examine these witnesses had been unfairly declined, thereby violating the principles of natural justice that must be complied with no matter the strict rules of the Evidence Act had been excluded from its application. … …

Revenue / respondent submissions

The judgment does not separately label the respondent’s submissions in an independently extractable passage. No contention is inferred; read the full record.

Court / Tribunal analysis and reasoning

The said order reads as under: “1. The instant writ petition seeks to assail the validity of a Show Cause Notice [“SCN”] dated 29 May 2024 and which raises issues pertaining to Financial Years [“FYs”] 2017-18 to 2021-22. 2. The principal ground of challenge which was addressed before us was with respect to the action of the respondents who have proceeded to issue a consolidated notice for the aforesaid period. 3. On an ex -facie perusal of Section 74 of the Central Goods & Services Tax Act, 2017 [“CGST”]/Delhi Goods & Services Tax Act, 2017 [“DGST”], we find ourselves unable to sustain that challenge in the absence of any prohibition that may have been statutorily e ngrafted in this respect.

initiate appropriate proceedings independently. 5. Bearing in mind the well settled principles which govern situations and contingencies in which a SCN challenge may be entertained by a Court under Article 226 of the Constitution, we find no ground to entertain the instant writ petition. 6. It shall, subject to the aforesaid observation, stand dismissed.”

Therefore the request for cross examination is denied under the principles laid doen K.L. Tripathi V. SBI, 1984(1)SCC 43 and other relevant precedents, as it is not essential for ensuring natural justice in this case.

24. Mr Malhotra, on the other hand, argued that the right of cross-examination was available to a party under the Evidence Act which had no application to the adjudication proceedings under FERA. … …He also placed reliance upon a decision of this Court in Surjeet Singh Chhabra v. Union of India(1997(1) SCC 508=1997 SCC (Cri) 272) to argue that cross -examination was unnecessary in certain circumstances such as the one at hand where all material facts were admitted by the appellants in their statements before the authority concerned. 25. There is, in our opinion, no merit even in that submission of the learned counsel. It is evident from Rule 3 of the Adjudication Rules framed under Section 79 of FERA that the rules of procedure do not apply to adjudication proceedings.

That does not, however, mean that in a given situation, cross -examination may not be permitted to test the veracity of a deposition sought to be issued against a party against whom action is proposed to be taken. It is only when a deposition goes through the fire of cros s-examination that a court or statutory authority may be able to determine and assess its probative value. Using a deposition that is not so tested, may therefore amount to using evidence, which the party concerned has had no opportunity to question. Such refusal may in turn amount to violation of the rule of a fair hearing and opportunity implicit in any adjudicatory process, affecting the right of the citizen.

If not, the Authority can record the reasons and proceed in the case. Moreover, cross examination need not also be of all persons whose statements are recorded. It could be permitted by the Authority in case of some persons and not all. 20. In the present case, the mere rejection of the Petitioner’s request for cross-examination cannot, in and of itself, be treated as a sufficient ground to bypass the statutorily prescribed appellate remedy and invoke the writ jurisdiction of this Court. 21. Therefore, the Court is of the opinion that the Petitioner ought to avail of its appellate remedy in accordance with law in respect of both orders dated 20th January, 2025 and 29th January, 2025 including the demand raised on 1st February, 2025.

Operative decision and relief

11. After the writ petition was disposed of on 3rd October, 2024, the Show Cause Notice proceedings continued before the Adjudicating Authority and the Petitioner made a request for cross -examination of five persons, namely, Sh. Vinod Baid, Sh. Kamal Kishore Karnani, Sh. Saurabh Aggarwal, Sh. Deepak Kumar Jha and Sh. Anil Kumar. The said prayer for cross - examination was denied/ rejected by the Adjudicating Authority on 20 th January, 2025, inter alia, on the ground that the statements in question were only corroborative of undisputed documentary evidence already on record, and thus, did not warrant cross-examination. 12. The Adjudicating Authority in this regard has relied on the decision of the High Court of Telangana in Mohammed Muzzamil and Another vs. The CBIC (W.P(C) 18081/2020) which held that cross -examination cannot be claimed as a matter of right especially if it does not make any material difference. The observation of the Adjudicating Authority is as under :- “Further the request for cross examination of said individuals or witnesses has been carefully examined. It is observed that –

by limitation. 23. Needless to add, that the appeal, which may be filed by the Petitioner shall be considered on its own merits without being influenced by any observations made today in this order. 24. The petition is disposed of. Pending application(s), if any, also stand disposed of.

Ratio and legal principle

The narrow proposition associated with M/S. VALLABH TEXTILES v. ADDITIONAL COMMISSIONER CENTRAL TAX GST, DELHI EAST AND ORS concerns issue and context: the present petition has been filed by the petitioner - vallabh textiles under article 226 of the constitution of india inter alia seeking setting aside of the orders dated 20th january, 2025 and 29th january, 2025 and 1st february, 2025 as arbitrary and in violation of the provisions of the cgst act, 2017 and article 14, 19(1)(g), 265, 300a of the constitution of india. operative disposition: the petitioner is , accordingly, permitted to approach the appellate authority by way of an appeal under section 107 of the cgst act within thirty days. if the appeal is filed within the said period, the same shall be considered on merits and shall not be dismissed on the ground of being The proposition cannot be separated from the judgment’s facts, the governing statutory version, the forum’s jurisdiction, and the exact relief recorded in W.P.(C) 4576/2025.

For working-paper purposes, the decision should be cited only after matching the material facts and reading the passages under the judgment-grounded record above. The editorial outcome label “Remanded / fresh adjudication” is a navigation aid; it does not replace the operative order or explain every issue in a multi-issue case.

Why this judgment matters

This decision is relevant when a file raises the same central question identified in the source headnote: Issue and context: The present petition has been filed by the Petitioner - Vallabh Textiles under Article 226 of the Constitution of India inter alia seeking setting aside of the orders dated 20th January, 2025 and 29th January, 2025 and 1st February, 2025 as arbitrary and in violation of the provisions of the CGST Act, 2017 and Article 14, 19(1)(g), 265, 300A of the Constitution of India. Operative disposition: The Petitioner is , accordingly, permitted to approach the Appellate Authority by way of an appeal under Section 107 of the CGST Act within thirty days. If the appeal is filed within the said period, the same shall be considered on merits and shall not be dismissed on the ground of being Its practical value lies in the way the Delhi High Court connected the governing provisions—GST statutory provision - Section 74; GST statutory provision - Section 74(10); GST statutory provision - Section 79; GST statutory provision - Section 107; GST statutory provision - Section 138; GST statutory provision - Section 139—to the procedural posture and evidence before it.

The authority level is High Court. That affects persuasive or binding weight, but authority level alone is never enough. Territorial jurisdiction, statutory period, the identity of the challenged order, and later appellate treatment must all be checked before the case is used in advice, a submission, or litigation strategy.

Practitioner action points

• Begin with the complete judgment and mark the paragraphs supporting the exact proposition relied upon.
• Match the statutory version of GST statutory provision - Section 74; GST statutory provision - Section 74(10); GST statutory provision - Section 79; GST statutory provision - Section 107; GST statutory provision - Section 138; GST statutory provision - Section 139 and the decision date 2025-04-09; do not assume the current text is identical.
• Compare the notice, assessment, appeal or other procedural sequence with the chronology recorded in this case.
• Verify the stated later-history status and any review, appeal, SLP, curative or rectification proceedings before citation.
• Record why the client’s evidence is materially similar, and also record any fact capable of distinguishing the result.

Does this case match your facts?

Detailed reliance and distinction analysis

Identity check. Confirm that the cited cause title is M/S. VALLABH TEXTILES v. ADDITIONAL COMMISSIONER CENTRAL TAX GST, DELHI EAST AND ORS, the proceeding is W.P.(C) 4576/2025, and the decision is dated 2025-04-09. These fields are taken from the judgment record and should appear exactly in the citation note.

Bench check. The judgment identifies the coram as JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA. A later order by another bench, a larger bench, or a higher forum may alter the weight or interpretation of the proposition.

Provision check. The source associates the dispute with GST statutory provision - Section 74; GST statutory provision - Section 74(10); GST statutory provision - Section 79; GST statutory provision - Section 107; GST statutory provision - Section 138; GST statutory provision - Section 139. The practitioner should place the historical statutory text next to the current text and identify every amendment, proviso, explanation, rule or notification that could change the analysis.

Fact check. The source issue is not a free-standing abstract rule. It arises from the concrete record summarized above. A reliable application note should list the common facts, the different facts, and whether each difference affects jurisdiction, admissibility, limitation, burden, computation or relief.

Remedy check. The recorded result is Remanded / fresh adjudication. Where a matter is remanded, set aside, partly allowed, or disposed with directions, the exact operative language is more important than a binary winner/loser label.

History check. The current closure state is REVIEW_APPEAL_SLP_SUBSEQUENT_TREATMENT_CHECK_PENDING. If that state is pending, the page does not assert that no later case exists. It means the check remains open and must be completed at the point of professional reliance.

Section / provision impact

• GST statutory provision - Section 74 — apply the exact version considered in the judgment.
• GST statutory provision - Section 74(10) — apply the exact version considered in the judgment.
• GST statutory provision - Section 79 — apply the exact version considered in the judgment.
• GST statutory provision - Section 107 — apply the exact version considered in the judgment.
• GST statutory provision - Section 138 — apply the exact version considered in the judgment.
• GST statutory provision - Section 139 — apply the exact version considered in the judgment.

Case network

• SAKSHI ELECRICALS POLYMERS ENGG CORPN v. GOVERNMENT OF NCT DELHI & ANR. — Delhi High Court · Remanded / fresh adjudication
• Sun Aero Ltd. v. PCIT — Delhi High Court · Quashed / set aside
• DIRECTORATE GENERAL OF GST INTELLIGENCE v. GIRISH SACHDEVA — Delhi High Court · Disposed
• Sun International Limited v. Commissioner of Delhi Goods and Services Tax and Another — Delhi High Court · Allowed / set aside

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