Exide Industries Limited Vs Assistant Commissioner (Delhi High Court)
Date: April 16, 2025
Subject Matter
Limitation period outlined in Section 75(3) doesn't apply in case of repeated adjournments
Summary
In the case of Exide Industries Limited, the Delhi High Court addressed issues surrounding the Order-in-Original passed by the Adjudicating Authority concerning Input Tax Credit (ITC) eligibility and substantial penalties. The Court observed that the petitioner had sought multiple adjournments which contributed to delays, indicating laxity on their part. Despite this, it highlighted that the respondent had failed to provide adequate opportunity for a personal hearing before passing the detailed order raising a demand exceeding Rs. 12 crores, including penalties amounting to over Rs. 6 crores. The Court recognized a breach of natural justice due to the lack of a proper hearing for the petitioner. It also imposed a cost of Rs. 1 lakh on the petitioner to be paid to the Delhi High Court Bar Association for their laxity. The Court ordered that the impugned order dated February 3, 2025, be set aside, requiring that a proper hearing be scheduled for the petitioner. The hearing notice must be communicated at least five working days in advance, and no further adjournments should be sought by the petitioner. Importantly, since the petitioner had previously sought repeated adjournments, the limitation period outlined in Section 75(3) of the CGST Act would not apply in this instance. The petition was ultimately disposed of in these terms, and any pending applications were likewise concluded.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This hearing has been done through hybrid mode.
2. Allowed, subject to all just exceptions. Application is disposed of. P.(C) 4822/2025 & CM APPL. 22130/2025 (for stay)
3. The present petition has been filed by the Petitioner- Exide Industries Limited under Article 226 and 227 of the Constitution of India, inter alia, seeking issuance of an appropriate writ assailing the impugned order dated 3rd February, 2025 (hereinafter, ‘order’) along with the Form GST DRC-07 dated 4th February 2025 which has been passed by the Adjudicating Authority.
4. There are various allegations in the said order and a demand has been raised on the ground that ineligible Input Tax Credit (hereinafter, ‘ITC’) was availed of by the Petitioner.
5. The show cause notice (hereinafter, ‘SCN’) in the present case was issued on 17th May, 2024. The Petitioner filed the reply to the SCN on 10th June, 2024. Thereafter, the personal hearing was scheduled on 20th November, 2024. But the case of the Petitioner is that the said hearing notice was not received by the Petitioner.
6. The next hearing was fixed on 5th December, 2024, for which, an extension was sought by the Petitioner for 19th December, 2024. Again, a notice for personal hearing on 16th December, 2024 was served and according to the Petitioner, the notice was received on the date of the hearing itself.
7. Thereafter, the Petitioner’s representatives are stated to have visited the Respondent’s office. However, without giving any further hearing, the order has been passed.
8. The Court has perused the repeated personal hearing notices which have been issued. Clearly, there has been a laxity by the Petitioner. However, the Respondent No. 1 also could have put the Petitioner to terms and not have passed a detailed order raising a substantial demand running into more than Rs.12 crores including the recovery of ineligible ITC and penalty of Rs.6,34,61,579/-.
9. Considering the fact that the Petitioner has not been afforded a hearing though some attempts were made by the Petitioner to thereafter approach the Respondent No. 1’s office, there would be breach of natural justice.
10. However, due to the laxity of the Petitioner, a sum of Rs.1 lakh is imposed as costs to be contributed to the Delhi High Court Bar Association.
The details of the same are as under:
Name: Delhi High Court Bar Association
Account No.: 15530100000478
IFSC: UCBA0001553
Branch: UCO Bank, Delhi High Court
11. Subject to the payment of said costs within a period of one week, the impugned order dated 3rd February, 2025 is set aside.
12. The Petitioner shall be given a hearing by the Respondent No. 1. Proof of payment of costs shall be shown to the Adjudicating Authority. The hearing notice shall be communicated to the Petitioner both on the portal as also through the ld. Counsel on the following contact details:
Name: Mr. Siddharth Punj, Advocate.
Mob. No.: 9999317292
Email: Siddharth.punj@reinalegal.com
13. It is made clear that the hearing shall be fixed with at least five working days advance notice.
14. No adjournment shall be sought by the Petitioner on the said date.
15. It is also made clear that since repeated adjournments have been sought by the Petitioner, the period of limitation for passing the Order-in-Original in terms of Section 75(3) of the Central Goods and Service Tax Act, 2017, shall not apply in the present case.
16. Petition is disposed of in these terms. All pending applications, if any, are also disposed of.