Delhi High Court Stays CGST Order, Seeks Affidavit, Bars Recovery

The High Court of Delhi granted a stay of the Order dated 12th February, 2021 under Section 73 of the CGST Act and directed GNCTD to file an affidavit within four weeks due to alleged concealment of facts. The Court also instructed Respondent Nos. 2 and 3 not to initiate any recovery proceedings during the pendency of the writ petition.

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Issues:
1. Stay of Order dated 12th February, 2021 based on a show cause notice.
2. Direction to Respondent Nos. 2 and 3 not to initiate recovery proceedings under Section 79 of the CGST Act, 2017.

Issue 1: Stay of Order dated 12th February, 2021 based on a show cause notice.
The petitioner filed an application seeking a stay of the Order dated 12th February, 2021, along with a direction to Respondent Nos. 2 and 3 not to initiate any recovery proceedings during the pendency of the writ petition. The petitioner's counsel argued that a significant tax liability was imposed based on a vague and non-speaking order. The counsel contended that the impugned show cause notice and the Order dated 12th February, 2021 were legally unsustainable. The Court, after considering the submissions, issued a notice to the respondents. Respondent No. 1 and GNCTD accepted the notice. GNCTD's counsel mentioned a concealment of facts and was directed to file an affidavit within four weeks. The Court granted a stay of the Order dated 12th February, 2021 passed under Section 73 of the CGST Act until further orders.

Issue 2: Direction to Respondent Nos. 2 and 3 not to initiate recovery proceedings under Section 79 of the CGST Act, 2017.
The petitioner sought a direction to prevent Respondent Nos. 2 and 3 from commencing any recovery proceedings under Section 79 of the CGST Act, 2017. The Court, after considering the arguments presented by the petitioner's counsel regarding the unsustainable nature of the show cause notice and the Order dated 12th February, 2021, issued a notice to the respondents. Respondent No. 1 and GNCTD accepted the notice. GNCTD's counsel highlighted a concealment of facts and was directed to submit an affidavit within four weeks. The Court ordered a stay of the Order dated 12th February, 2021 passed under Section 73 of the CGST Act until further orders.

In conclusion, the High Court of Delhi granted a stay of the Order dated 12th February, 2021 under Section 73 of the CGST Act, and directed GNCTD to file an affidavit within four weeks due to alleged concealment of facts. The Court also instructed Respondent Nos. 2 and 3 not to initiate any recovery proceedings during the pendency of the writ petition.

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