VDR Colors And Chemicals Pvt. Ltd. Vs Commissioner of Delhi & Anr. (Delhi High Court)
The petitions before the Delhi High Court challenged an adjudication order dated 29 January 2025 passed by the Assistant Commissioner (Adjudication), CGST Delhi North, pursuant to a show cause notice (SCN) dated 21 May 2024. The proceedings arose from a DGARM report relating to verification of a proprietary concern, which revealed extensive inward transactions allegedly involving non-existent supplier firms. Further analysis indicated that credit was extended to several recipients, including the petitioners. Physical verifications were conducted, statements were recorded and later retracted, and it was alleged that the transactions were supported only by invoices without actual movement of goods, resulting in alleged fraudulent availment of Input Tax Credit (ITC) running into several crores.
Based on these allegations, the SCN was issued, and the petitioners filed a reply on 30 August 2024. The core grievance raised before the Court was that the impugned adjudication order was passed without granting a personal hearing, in violation of principles of natural justice. The petitioners argued that there was no proof of dispatch of hearing notices, and therefore the order deserved to be set aside. The Department, however, relied on the impugned order itself, which recorded that personal hearing opportunities were granted on multiple dates and that the matter was decided ex parte due to non-appearance of the noticees.
