Perfetti Van Vs Additional Commissioner (ADJN) CGST Delhi North & Ors (Delhi High Court)
New Delhi: The Delhi High Court has set aside a Goods and Services Tax (GST) demand exceeding ₹10 crore raised against M/s Perfetti Van Melle India Pvt. Ltd., directing the tax authorities to conduct a fresh adjudication after considering the company’s response to the show cause notice.
The case centered on a dispute over the applicable GST rate for the petitioner’s products, specifically whether they should be taxed at 12% or 18%. The tax department had issued a show cause notice on August 4, 2024, proposing a demand of ₹10,86,92,372.
Perfetti Van Melle stated that it had filed a detailed reply to the show cause notice electronically on September 2, 2024, and also submitted a hard copy the following day.
However, the impugned Order-in-Original, dated January 6, 2025, recorded that no reply had been received from the petitioner. The order also noted the petitioner’s absence during personal hearing dates, stating that letters sent by post were returned undelivered. The adjudicating authority concluded that the petitioner had not submitted a written reply or availed the opportunity for a personal hearing and proceeded to decide the case ex-parte, accepting the charges leveled in the show cause notice due to the perceived lack of representation.
The Delhi High Court, upon reviewing the petition, observed that a substantial demand of over ₹10 crore was confirmed without considering the petitioner’s detailed reply, which was filed well within the stipulated time. The court found that the Order-in-Original’s assertion of no reply being received was incorrect.
During the High Court proceedings, counsel for the CGST Department was given multiple opportunities to obtain instructions but failed to do so. The department’s counsel argued that the Order-in-Original was appealable and the reply could have been considered at the appellate stage.
The High Court, however, was not swayed by this argument. It held that the impugned order was unsustainable because the adjudicating authority had completely ignored the reply filed by the petitioner. The court emphasized that the order explicitly stated that no reply was filed, which contradicted the facts presented.
Consequently, the High Court set aside the impugned Order-in-Original and the subsequent summary demand in Form GST DRC-07. The matter has been remanded back to the adjudicating authority for a fresh hearing.
The court directed the CGST Department to provide the petitioner with three dates for personal hearing to present their submissions. The adjudicating authority is required to decide the matter within three months after hearing the petitioner. The court also specified that the personal hearing notices should be uploaded on the portal, emailed, and communicated to designated email addresses and mobile numbers of the petitioner’s representatives.
The petitioner’s counsel also informed the court that favorable decisions in similar matters had been rendered by authorities in two other jurisdictions. The court allowed the petitioner to place these relevant orders before the adjudicating authority during the fresh proceedings.
The High Court clarified that it had not examined the merits of the case and the adjudicating authority should pass a fresh order in accordance with the law after hearing the petitioner. All rights and remedies for both parties remain open.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
