In a recent ruling, the Delhi High Court has set aside a Goods and Services Tax (GST) demand of over ₹12 crore imposed on Exide Industries, a leading storage battery manufacturer in India. The demand was raised due to alleged wrongful availment of Input Tax Credit (ITC).
The case was heard by a division bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta. While granting relief from the tax demand, the court also held the company accountable for negligence in responding to several hearing notices from the tax department.
"Clearly, there has been a laxity by the Petitioner,” the Court observed while going through the records of missed communications.
The case began when Exide Industries challenged a final order and Form DRC-07 issued by the Adjudicating Authority. The company contested the recovery of GST dues mentioned in the order.
According to the timeline of events:
- A show cause notice (SCN) was issued on May 17, 2024.
- The company submitted its reply to the SCN on June 10, 2024.
- A personal hearing was scheduled for November 20, 2024, but the company claimed it did not receive the notice.
- The next hearing was set for December 5, 2024, for which the company requested a reschedule to December 19, 2024.
- Another notice was issued for December 16, 2024, which the company claims it received on the same day as the hearing.
The representatives of Exide then visited the department's office. However, without offering another hearing, the department proceeded to pass the impugned order.
“The Petitioner had not been afforded a hearing though some attempts were made... there would be breach of natural justice,” the Court noted.
Taking into account this procedural lapse, the Court nullified the ₹12 crore GST demand but imposed a penalty of ₹1 lakh on Exide Industries for its “laxity” in dealing with the notices. This amount is to be deposited with the Delhi High Court Bar Association.
Read also: Delhi High Court Cancels IRCTC Catering Tender Over Non-Disclosure of Criminal Cases by Bidder
The Court further instructed the Adjudicating Authority to issue a fresh hearing notice and continue the proceedings according to the law.
Appearance: Mr. Gajendra Maheshwari, Mr. Siddharth Punj & Ms. Priyamwada Sinha, Advs for Petitioner; Mr. R. Ramachandran, SSC with Mr. Prateek Dhir, Adv for Respondent
Case title: Exide Industries Ltd. v. Assistant Commissioner, CGST & Ors.
Case no.: W.P.(C) 4822/2025
