Exide Industries Fined Rs. 1 Lakh for not responding to repeated notices:

Exide Industries Fined Rs. 1 Lakh for not responding to repeated notices The Delhi High Court has cancelled a GST demand of more than Rs. 12 crore made to Exide Industries Limited but imposed a fine of Rs. 1 lakh on the company for not responding to repeated notices issued by the GST department. The order was in a matter where Exide Industries had protested against the order and the supporting Form GST DRC-07 dated 4th February 2025, issued by the Adjudicating Authority under the Central Goods and Services Tax (CGST) Act. The order had raised serious charges against the company, such as the wrongful availing of ineligible Input Tax Credit (ITC). The aggregate demand included a penalty of Rs. 6,34,61,579. The bench, consisting of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta, remarked that while several personal hearing notices were sent, there seemed to be laxity on the part of the petitioner in attending or replying accordingly. The court also mentioned that the CGST Assistant Commissioner could have been more balanced in his approach instead of passing a detailed order raising such a huge tax demand. The case centers on a show cause notice (SCN) served to the company, to which the company had made a written response. Subsequently, a personal hearing was arranged, but the company argued that it did not receive the notice for the hearing within time. When a new hearing date was set, the petitioner requested an extension. Again, a notice was issued, but as per the petitioner, it was received on the very date of the hearing. A visit was made to the Respondent's office (CGST Department), as mentioned by the company. Without giving any other opportunity for a hearing, the order was passed. The court acknowledged that the company was not granted a fair hearing and emphasized that the right to be heard is a fundamental aspect of natural justice. It noted that some efforts were made by the petitioner to approach the CGST officer, which were not adequately considered. Though keeping aside the Rs. 12 crore demand, the court emphasized the absence of prompt response on the part of the petitioner as a contributory factor and directed a cost of Rs. 1 lakh. The amount is to be deposited with the Delhi High Court Bar Association. The ruling upholds the law that while tax authorities do enjoy the prerogative of making demands, the taxpayers should also be provided a reasonable and fair opportunity to put across their perspective.