M/S Perfetti Van Melle INDIA PVT LTD vs. Additional Commissioner (Adjn.) CGST Delhi North & Ors.
Original PDF →Facts
The Petitioner, M/s Perfetti Van Melle India Pvt. Ltd., filed a writ petition challenging an Order-in-Original dated January 6, 2025, and a subsequent Form GST DRC-07 summary dated January 25, 2025. The dispute concerns the correct GST rate applicable to the Petitioner's products, with the revenue proposing 18% instead of the Petitioner's claimed 12%. A show cause notice was issued on August 4, 2024, proposing a demand of Rs. 10,86,92,372/-. The Petitioner claims to have filed a detailed reply on September 2, 2024, both electronically and physically. However, the Order-in-Original erroneously recorded that no reply was received and proceeded ex-parte, citing non-receipt of replies and non-appearance for personal hearings, despite the Petitioner asserting that the reply was filed in time.
Held
The Court held that the impugned Order-in-Original was not sustainable because it completely ignored the Petitioner's reply, which was allegedly filed well within time. The adjudicating authority's finding that no reply was received was contrary to the Petitioner's assertion. The Court emphasized that a substantial demand of over Rs. 10 crores was raised without considering the Petitioner's stand, which violates the principles of natural justice. Consequently, the Court set aside the impugned Order-in-Original. The matter was remanded to the adjudicating authority for a fresh hearing. The Respondent-CGST Department was directed to provide three dates of hearing to the Petitioner. The adjudicating authority is to decide the matter within three months after hearing the submissions. The Court also directed that personal hearing notices be uploaded on the portal, emailed, and communicated via specific email addresses and mobile numbers provided by the Petitioner. The Petitioner was also permitted to place on record orders from other jurisdictions dealing with similar facts. The Court explicitly stated that it had not examined the merits of the matter.
Key Issues
1. Whether the Order-in-Original, which proceeded ex-parte and raised a demand of Rs. 10,86,92,372/-, is sustainable when the Petitioner claims to have filed a detailed reply to the show cause notice. Petitioner's arguments: The Petitioner contended that a detailed reply to the show cause notice was filed on September 2, 2024, well within the stipulated time. The adjudication authority erroneously recorded that no reply was received and proceeded ex-parte, thereby violating the principles of natural justice. The Petitioner also highlighted that similar matters in other jurisdictions have been decided in their favour. Revenue's arguments: The Revenue, through its counsel, stated that no instructions had been received from the CGST Department. The counsel also submitted that the Order-in-Original was appealable and the reply could have been considered before the appellate authority.
Sections Cited
Section 169
AI-generated summary — verify with the full judgment below
W.P.(C) 2178/2025 $~5 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 16th April, 2025 + W.P.(C) 2178/2025 & CM APPL. 10285/2025 M/S PERFETTI VAN MELLE INDIA PVT LTD .....Petitioner Through: Ms. Charanya Lakshmikumaran, Mr. Yogendra Aldak, Mr. Kunal Kapoor, Mr. Yatharth Tripathi, Advocates versus ADDITIONAL COMMISSIONER (ADJN.) CGST DELHI NORTH & ORS. .....Respondents Through: Mr. Shivam, Advocate for Mr. Jatin Singh, Advocate. CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA Prathiba M. Singh, J. (Oral)
This hearing has been done through hybrid mode.
The present writ petition filed by the Petitioner- M/s Perfetti Van Melle India Pvt. Ltd. under Article 226 of the Constitution of India, inter alia, assailing the impugned Order-in-Original bearing no. 35/ADC/D.N./BHAVAN MEENA/2024 dated 06th January, 2025 (incorrectly mentioned as 06th January, 2024) followed by the Form GST DRC-07 summary bearing reference no. ZD070125035322W dated 25th January, 2025. 3. The allegation in the present petition is in respect of the short payment of Goods and Service Tax (hereinafter, ‘GST’) qua products which are sold by the Petitioner. The question that arises in the present petition is as to W.P.(C) 2178/2025 whether the products of the Petitioner are liable for GST at 12% or 18%.
The show cause notice (hereinafter, ‘SCN’) was issued on 04th August, 2024 to the Petitioner to show cause as to why demand should not be raised to the tune of Rs.10,86,92,372/- .
The reply to the said SCN was filed by the Petitioner in detail which was uploaded by the Petitioner on the portal on 02nd September, 2024 and the hard copy of the same was also served on 03rd September, 2024. 6. Ld. Counsel for the Petitioner submits that the same was also emailed on 02nd September, 2024. 7. Unfortunately, however, the Order-in-Original records that no reply has been received from the Petitioner. The relevant portion of the order reads as under:
“19. The noticee has not given any submissions in response to the Show Cause Notice No.170/2024-25 dated 04.08.2024 issued vide F.No.IV(Hqrs.Prev)GSTN/ 12/2972/ Gr.2/2023/30624. Further, following the principle of natural justice, the noticee was granted personal hearing (PH) on 27.11.2024, 09.12.2024 & 27.12.2024. The PH letters sent through by post was returned back by the postal authority having the remark "no such person". Further, neither the Noticee nor their authorized representative had appeared before the Adjudicating Authority for personal hearing on the said dates. Thus, on the basis of available facts and records, I proceed to examine the instant case. XXXX
In view of the above, the department has complied with the provisions of Section 169 of the CGST Act, 2017 in their matter of Personal hearing. I find that the Noticee has never submitted any written reply or availed the opportunity for PH whenever the same was provided to them. They not even bothered to offer the reason for W.P.(C) 2178/2025 the same or to come forward for any hearing despite giving ample opportunities to them. The letters sent to them have been returned undelivered for one reason or the other by the postal authorities. I find that there is nothing on record to suggest that they have changed their addresses, which also entails a strong belief that they have purposely changed their addresses to avoid the proceedings against them. The act of Noticee, thus, unequivocally bear out that they were interested in avoiding the proceedings. They avoided filing reply to the Show Cause Notice purposely to delay the proceedings and to avoid the clutches of laws. I find that they have sensed trouble and have avoided the proceedings without any reasons. I, therefore, hold that by giving ample opportunities of. Personal Healing as above, principle of natural justice is compiled in this case and also department meticulously followed the procedure as set out in the Section 169 of the CGST Act, 2017. XXXX
Thus, in absence of any representation, written or oral, on behalf of the Noticee, I conclude that the charges levelled against them in the impugned show cause notice are accepted by them in toto as per their alleged role as brought out in the show cause notice. Further, the Noticee never availed the opportunity of PH before me. Further, non-disclosure of the true facts itself means suppression of facts by the Noticee. It is a deliberate act on their part as enough time has passed giving them a lot of opportunities to present their case but they have not heeded anything towards the replying of the show cause notice. So, in the aforesaid circumstances, I am inclined to decide the present case ex-parte, in favour of department, in respect of charges levelled against the Noticee.”
Clearly, a substantial demand of more than Rs.10 crores has been raised without considering the stand of the Petitioner despite the fact that the reply W.P.(C) 2178/2025 was filed well within time way back in September, 2024 itself.
The present petition has been served upon the Central Goods and Service Tax (hereinafter, ‘CGST’) Department on 19th February, 2025. 10. Ld. Counsel for the Respondents were directed to obtain instructions. The matter was adjourned on two other dates i.e. 10th March 2025 and 24th March 2025 and on 28th March, 2025, last opportunity was given to Mr. Jatin Singh, ld. Counsel for the Respondents, to take instructions. The relevant portion of the said order dated 28th March 2025 reads as under: “Learned Counsel appearing for the Respondent states that he is yet to receive instructions. He prays for one last opportunity to get instructions.”
Today also Mr. Shivam appearing for Mr. Jatin Singh submits that no instructions have been received from the CGST Department.
Ld. Counsel for the Respondents submits that the present Order-in- Original is an appealable order and the reply could have been considered before the appellate authority itself.
Considering the fact that the reply has been completely ignored by the adjudication authority, the impugned order would not be sustainable. The said Order-in-Original clearly records that no reply was filed.
Accordingly, the impugned Order-in-Original is set aside.
The matter is remanded to the adjudicating authority for a fresh hearing.
The Respondent- CGST Department shall give three dates of hearing to the Petitioner to appear and to address submissions. After hearing submissions, the adjudicating authority shall decide the matter within three months.
The personal hearing notice shall be uploaded on the portal, emailed W.P.(C) 2178/2025 and also communicated on the following email address and mobile number. ●Email Address-pulkit.babbar@perfettivanmelle.com ; Mobile No.- 9899707807 ●Email Address- vaibhav.mangal@perfettivanmelle.com ; Mobile No.- 9650295777
Ld. Counsel for the Petitioner submits that two other juri ictions in similar facts and circumstances have taken a decision in favour of the Petitioner. Let the relevant orders be also placed on record before the adjudicating authority.
Accordingly, the present petition is disposed of remanding the matter for fresh decision by the adjudicating authority. The impugned order dated 6th January 2025, is set aside. Pending applications, if any, are also disposed of.
It is made clear that this Court has not examined the merits of the matter.
The adjudicating authority after hearing the Petitioner shall pass the Order-in-Original in accordance with law. All rights and remedies are left open. PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE APRIL 16, 2025 v/ck
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.