In a significant relief to Delta Corp, the Sikkim High Court has stayed the Rs 628 crore Goods and Services Tax (GST) demand imposed on the company. The court’s decision comes as a major blow to the tax authorities who have been aggressively pursuing cases against businesses accused of evading taxes.
According to sources close to the development, the high court passed the stay order after hearing a petition filed by Delta Corp challenging the GST demand. The company had argued that the demand was baseless and violated several provisions of the GST Act.
The case dates back to 2019 when the GST authorities issued a notice to Delta Corp alleging that the company had failed to pay GST worth Rs 628 crores. The authority claimed that the company had wrongfully availed input tax credit (ITC) on various goods and services. However, Delta Corp refuted the allegations and maintained that all its transactions were legitimate and compliant with the GST norms.
Delta Corp’s legal team, led by senior advocate Amit Sibal, presented strong arguments before the high court, pointing out several flaws in the GST authority’s assessment. They contended that the authority had acted beyond its jurisdiction and failed to consider relevant facts and evidence submitted by the company.
After hearing both sides, the high court bench comprising Chief Justice A.P. Subramanium and Justice S. Mahindra granted interim relief to Delta Corp, staying the GST demand until further orders. The court also directed the GST authorities to respond to Delta Corp’s petition within four weeks.
This ruling is seen as a significant victory for Delta Corp, which has been fighting multiple legal battles related to taxation in recent times. In September last year, the Bombay High Court had ruled in favor of the company in a similar case involving a GST demand of Rs 174 crores.
The latest verdict from the Sikkim High Court reinforces the principle of natural justice and underscores the importance of fair play in taxation matters. It also serves as a reminder to tax authorities to exercise caution and adhere to due process while investigating cases of alleged tax evasion.
While the stay order is a temporary reprieve for Delta Corp, it may have broader implications for other companies facing similar issues with the GST authorities. As India continues to strengthen its tax regime, such judgments can help foster greater confidence among businesses and promote a culture of compliance.
As the dust settles on this high-profile case, attention now shifts to the GST authorities’ response to the high court’s directive. How they choose to address the concerns raised by Delta Corp and the court’s observations could shape the future course of tax litigation in India. For now, though, Delta Corp can breathe easier knowing that the law is on its side.