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M/S Kashish Products Impex Pvt. Ltd. vs. Deputy Commissioner, Goods & Service Tax, Central Taxes, Delhi West, Division – Rohini

Central Excise Appeal · 2026:DHC:7417-DBDecided 1 Sept 2026New Delhi Bench
CEAC 4/2025CNR: DLHC010138882025
Justice Nitin Wasudeo Sambre · Justice Ajay Digpaul

Background

Kashish Products, a PVC manufacturer, was accused by the excise department of billing customers for goods it never actually supplied and wrongly claiming CENVAT tax credit, leading to a demand of Rs. 9.73 crore in 2010. It had deposited Rs. 1.65 crore as a "pre-deposit" to contest the case, and after winning before the tax tribunal (CESTAT) in 2018, sought that deposit back with interest. A dispute then arose over how much interest was owed and from which date, which the department's appellate Commissioner decided against the company in an ex-parte order in 2019: allegedly without properly notifying it of the hearing dates. CESTAT dismissed the company's further appeal on this point in 2024.

Decision Breakdown

The High Court found that although hearing notices were said to have been issued, the tax department could produce no proof they were actually served on Kashish. It was also shown that on one of the very dates a hearing was supposedly missed, the company's lawyer had, in fact, appeared before the same appellate officer in a companion case involving the same parties, making it implausible he simply chose not to turn up for this one. The Court held the notices were not proven to have been served, meaning the company was denied a genuine hearing, and sent the interest-calculation question back to the Commissioner (Appeals) for a fresh decision, with the company directed to appear on 21 September 2026.

Lesson Learnt

A tax authority cannot decide a case against a party ex-parte merely by showing it "issued" hearing notices: it must be able to prove those notices actually reached the party, and courts will set aside orders passed without a genuine opportunity to be heard.

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