Hindustan Coca-Cola Beverages Private Limited vs. Commissioner, Central Tax (Delhi West) & Ors.

Facts

The Petitioner, Hindustan Coca-Cola Beverages Private Limited, challenged an ex-parte Adjudication Order dated August 24, 2024, and the Show Cause Notice dated May 30, 2024, before the Delhi High Court. The Petitioner sought to quash these orders, arguing the Show Cause Notice was time-barred under Section 73(10) of the CGST Act. The Petitioner was granted three opportunities for personal hearing on July 26, 2024, August 6, 2024, and August 20, 2024. On the first two dates, the Petitioner submitted replies and sought adjournments. On August 20, 2024, the Adjudicating Authority was unavailable due to election duty, which the Petitioner supported with evidence. Despite this, the Adjudicating Authority proceeded to pass the Impugned Order.

Held

The Court held that the Adjudicating Authority failed to provide an adequate opportunity of personal hearing to the Petitioner before passing the Impugned Order. The Court emphasized that a reply submitted by the assessee is not a substitute for a personal hearing. It was noted that the Adjudicating Authority was on election duty on August 20, 2024, the last scheduled date for personal hearing, and the Petitioner had provided evidence to this effect. The Court found it unacceptable that the Adjudicating Authority proceeded to pass an order imposing a huge liability of over Rs. 180 crores without ensuring a proper personal hearing. While the Revenue argued that the order needed to be passed by August 31, 2024, and four working days were available, the Court observed that the Adjudicating Authority should have rescheduled the hearing on one of those days. Consequently, the Impugned Order was set aside. The Court did not delve into the merits of the other submissions, including the time-bar issue raised under Section 73(10) of the CGST Act. The matter was remanded for fresh decision within six weeks after granting an opportunity of hearing to the Petitioner.

Key Issues

1. Whether the Adjudicating Authority failed to provide an adequate opportunity of personal hearing to the Petitioner before passing the Impugned Order, thereby violating principles of natural justice, as contemplated under the CGST Act and DGST Act? 2. Whether the Show Cause Notice dated May 30, 2024, is barred by limitation under Section 73(10) of the CGST Act, 2017? Petitioner's Arguments: The Petitioner contended that the Adjudicating Authority failed to grant a proper personal hearing, especially on August 20, 2024, when the authority was on election duty. They argued that the Impugned Order was passed without considering their submissions and that the Show Cause Notice was time-barred. They relied on the fact that the Adjudicating Authority was unavailable on the scheduled hearing date and that the Petitioner had provided evidence of this. The Petitioner also argued that the Adjudicating Authority should have rescheduled the hearing given the significant demand of over Rs. 180 crores. Revenue's Arguments: The Revenue submitted that the Petitioner's reply dated August 20, 2024, was considered while passing the Impugned Order. They also argued that the order was required to be passed by August 31, 2024, and that four working days were available, implying the Adjudicating Authority proceeded to pass the order within the stipulated time. The Revenue did not dispute that an opportunity of personal hearing is generally required.