In a recent ruling, the Delhi High Court acknowledged a degree of procedural laxity on Exide Industries’ part in responding to hearing notices and imposed Rs. 1 Lakh cost while remanding the matter for fresh hearing.
Exide Industries Limited, the petitioner had challenged an order dated 3rd February 2025 and the corresponding GST DRC-07 form issued on 4th February 2025, which had raised a tax demand exceeding Rs. 12 crores, including a penalty of Rs. 6.34 crores, on grounds of alleged ineligible Input Tax Credit (ITC).
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The company argued that it was not served with sufficient advance notice for the personal hearings scheduled in November and December 2024. In particular, it claimed to have received a hearing notice only on the day of the hearing itself.
The bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that the company had indeed delayed attending hearings and the GST authority had also failed to ensure proper communication of notices or accommodate the company’s attempts to engage after initial lapses. The court held that the adjudicating authority ought to have refrained from issuing a final order without affording a proper hearing.
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The court quashed the impugned order but also imposed a cost of Rs. 1 lakh on Exide Industries for its delayed responses, directing the amount to be paid to the Delhi High Court Bar Association. The Court further ordered that the petitioner be granted a fresh hearing with at least five working days’ notice and instructed that no adjournments would be allowed thereafter.
The court also clarified that the period of limitation under Section 75(3) of the CGST Act, 2017, would not apply in this case, owing to the company’s earlier delays. The writ petition was accordingly disposed of with directions for a new hearing.
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