Facts of the Case

The Petitioner, M/s Perfetti Van Melle India Pvt. Ltd., filed a writ petition under Article 226 of the Constitution challenging an Order-in-Original dated 06.01.2025 and consequential Form GST DRC-07 dated 25.01.2025, whereby a demand of approximately ₹10.86 crore was raised alleging short payment of GST.

The core dispute pertained to the applicable GST rate (12% vs 18%) on products sold by the Petitioner.

A Show Cause Notice (SCN) dated 04.08.2024 was issued. The Petitioner submitted a detailed reply on 02.09.2024 (online and via email) and also furnished a hard copy on 03.09.2024.

However, the adjudicating authority erroneously recorded that no reply had been filed and proceeded to pass an ex-parte order, confirming the demand.

Issues Involved

  1. Whether the impugned Order-in-Original passed without considering the Petitioner’s reply violates the principles of natural justice.
  2. Whether the adjudicating authority could proceed ex-parte despite the Petitioner having filed a reply.
  3. Whether the existence of an alternative appellate remedy bars writ jurisdiction in such circumstances.
  4. Determination of applicable GST rate (12% or 18%)—though not adjudicated on merits.

Petitioner’s Arguments

  • The Petitioner had duly filed a detailed reply within time via:
    • GST portal
    • Email
    • Physical submission
  • The adjudicating authority failed to consider the reply and incorrectly recorded non-submission.
  • Passing an order involving a huge demand (~₹10.86 crore) without considering submissions is a gross violation of natural justice.
  • The entire adjudication process stood vitiated due to procedural irregularity.

Respondent’s Arguments

  • The Respondents contended that:
    • The impugned order is appealable, and the Petitioner should have availed the appellate remedy.
    • Opportunity of personal hearing was granted, but allegedly not availed. 

Court’s Findings / Order

The Delhi High Court held:

  • The adjudicating authority’s observation that no reply was filed is incorrect, as the Petitioner had submitted the reply within time.
  • Passing an order without considering the reply amounts to serious violation of principles of natural justice.
  • The availability of an alternative remedy does not bar writ jurisdiction in cases involving procedural illegality.

Final Directions:

  • The impugned Order-in-Original dated 06.01.2025 was set aside.
  • The matter was remanded for fresh adjudication.
  • The adjudicating authority was directed to:
    • Provide three opportunities of hearing
    • Properly communicate hearing notices (portal, email, mobile)
    • Decide the matter within three months
  • The Court clarified that it did not examine merits of the GST rate issue.

Important Clarification

  • The Court emphasized that non-consideration of a reply itself vitiates adjudication, irrespective of availability of alternative remedy.
  • The ruling reinforces that procedural fairness is mandatory in GST proceedings, especially where substantial tax demands are involved.
  • The Court left all issues on merits, including GST classification/rate, open for fresh adjudication.

Sections Involved

  • Article 226 of the Constitution of India
  • Section 169 of the CGST Act, 2017 (service of notice)
  • Relevant provisions relating to:
    • Show Cause Notice (SCN)
    • Adjudication under GST law
    • Principles of Natural Justice

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/68916042025CW21782025_204009.pdf 

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