The Delhi High Court dismissed a writ petition filed by M/s Fone Zone NXT against the Commissioner of DGST and others, where the petitioner failed to respond to Show Cause Notices (SCN) issued under Section 73 of the DGST Act due to alleged negligence by their Chartered Accountant. The petitioner, a registered GST dealer in mobile phones, was notified of discrepancies in Input Tax Credit (ITC) via the GST portal and the email linked to their Chartered Accountant. Due to lack of response, ex parte adjudication orders were issued, creating a tax demand.
The petitioner argued that they were unaware of the proceedings because their Chartered Accountant failed to inform them. The core issue was whether the GST adjudication orders could be challenged on the grounds of the Chartered Accountant's alleged negligence. The court ruled that the responsibility for monitoring GST communications lies with the taxpayer, and linking the GST registration to a consultant's email does not exempt the taxpayer from compliance obligations.
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The court further noted that the taxpayer had not taken any action against the Chartered Accountant for the alleged negligence. It emphasized that readiness to deposit part of the demand does not allow bypassing the appellate remedy. Consequently, the court found the writ petition to be without merit and dismissed it. The decision underscores the importance of taxpayers maintaining active oversight of their GST communications and compliance responsibilities.
Parties: M/s Fone Zone NXT v. Commissioner of DGST & Ors.
Order date: 22 nd January, 2026
Facts –
- The petitioner, a registered GST dealer in mobile phones, was issued Show Cause Notices under Section 73 of the DGST Act for alleged ITC discrepancies.
- The notices and adjudication orders were communicated through the GST portal and the registered email ID linked to the petitioner’s Chartered Accountant.
- Due to non-response, ex parte adjudication orders were passed creating tax demand.
- The petitioner contended that it had no actual knowledge of the proceedings due to negligence on the part of its Chartered Accountant.
Issue –
- Whether ex parte GST adjudication orders can be interfered with on the ground that the assessee’s Chartered Accountant failed to inform the taxpayer about statutory notices and proceedings?
Order –
- The Court held that the responsibility to monitor GST communications rests with the registered taxpayer.
- Linking GST registration to a consultant’s email ID does not absolve the assessee of statutory compliance.
- Alleged negligence of the Chartered Accountant, without initiating action against him, cannot justify writ interference.
- Readiness to deposit part of the demand does not entitle the assessee to bypass the appellate remedy.
- The writ petition was dismissed as being devoid of merit.
