Pepsico INDIA Holding PVT LTD vs. The Additional Commissioner Office Of Prinicipal Collissioner CGST And Central Excise

Facts

PepsiCo India Holdings Pvt. Ltd. (Petitioner) filed a writ petition challenging a show cause notice dated September 22, 2023, issued by the Additional Commissioner, CGST & Central Excise, Pune-I (Respondent No. 1). A co-ordinate bench of the High Court, on December 1, 2023, directed the Petitioner to raise preliminary objections before the adjudicating officer, which were to be considered and decided within four weeks. The Petitioner filed these preliminary objections on December 5, 2023, stating they were attending the hearing solely for this purpose. However, the adjudicating officer, instead of deciding the preliminary objections, proceeded to pass an Order-in-Original on December 29, 2023, adjudicating the show cause notice itself. The Petitioner then amended its petition to challenge this Order-in-Original.

Held

The Court held that the adjudicating officer ought to have granted the Petitioner a fair opportunity to raise all contentions in the course of adjudication if the intention was to decide the show cause notice. The Court found that the Petitioner was taken by surprise and was not put to specific notice that the show cause notice itself would be decided. The adjudicating officer clearly overlooked the purport of the High Court's order dated December 1, 2023. The Court noted that the department should have sought a modification of the earlier order if they intended to proceed with the adjudication of the show cause notice. Therefore, the impugned Order-in-Original dated December 29, 2023, was quashed and set aside. The proceedings were remanded to the adjudicating officer for a fresh order, which would include deciding the preliminary objections and granting the Petitioner an opportunity to place relevant documents on record. The adjudicating officer was directed to fix an appropriate date for hearing and pass an order within six weeks thereafter, keeping all contentions open.

Key Issues

1. Whether the Order-in-Original dated December 29, 2023, passed by the adjudicating officer is ultra vires Section 61(1) of the CGST Act, Section 61 of the CGST Act read with Rule 99 of the CGST Rules, and Section 73 of the CGST Act, as argued by the Petitioner? 2. Whether the adjudication process leading to the Order-in-Original was fair, considering the High Court's previous order directing the decision of preliminary objections first, as contended by the Petitioner? Petitioner's Arguments: The Petitioner argued that the adjudicating officer failed to follow the High Court's order dated December 1, 2023, which mandated the decision of preliminary objections before adjudicating the show cause notice. The Petitioner contended that the adjudication was not fair as they were not given an opportunity to present relevant documents or argue the show cause notice itself, as they were under the impression that only preliminary objections would be considered. They relied on the High Court's order and principles of fair quasi-judicial adjudication. Revenue's Arguments: The Respondent did not dispute the High Court's order of December 1, 2023, and conceded that the adjudicating officer was expected to consider the preliminary objections. However, the Respondent argued that the law does not grant discretion to the adjudicating officer to decide preliminary objections separately before the show cause notice. They further submitted that the adjudicating officer found it proper to decide the show cause notice itself, given previous opportunities granted to the Petitioner.