M/S. Aarian Intasel Services Private Limited vs. The Union Of INDIA

Held

The Court considered the submissions and the documents annexed to the counter-affidavit. It found that the department had shown the despatch of the show cause notice through Speed Post on 21.11.2021. The Court noted that if the Petitioner had not received the show cause notice, the email acknowledging the personal hearing notice should have raised this issue. Since the Petitioner did not raise the plea of non-service of the show cause notice and did not participate in the proceedings despite receiving the personal hearing notice, the Court found this plea not tenable in facts or law. The Court also addressed the statement in paragraph 16 of the OIO, considering it an inadvertent error that did not warrant quashing the entire order, as the subsequent discussion in the OIO did not mention any stand conveyed by the Petitioner. The Court distinguished the present case from a coordinate bench's decision where notices were returned undelivered. Therefore, the Court was not inclined to interfere with the impugned order on the alleged ground of violation of principles of natural justice and dismissed the writ petition. The Court also stated that no liberty was required to be granted for preferring an appeal, as it was open for the Petitioner to seek such remedy if available in law.

Facts

M/s. Aarian Intasel Services Private Limited (Petitioner) filed a writ petition challenging an Order-in-Original (OIO) dated 29.08.2023, passed by the Assistant Commissioner, Central Tax, Hyderabad (Respondent No. 3). The OIO imposed a tax liability of Rs. 17,24,965/- for the period 2016-17, along with penalties under Section 78 and Section 77 of the Finance Act, 1994, and late fees for non-filing of ST3 returns. The Petitioner contended that the OIO was passed without issuing a show cause notice to them or their representatives, violating principles of natural justice. The Respondents, in their counter-affidavit, provided documents showing the despatch of the show cause notice and personal hearing notices via Speed Post. They also annexed an email acknowledgment from the Petitioner seeking further time for personal hearing, arguing that the Petitioner never raised the issue of non-service of the show cause notice in their reply.

Key Issues

1. Whether the action of the Respondent Nos. 2 to 4 in freezing the Petitioner company's bank account and passing the Order-in-Original No. 15612023-24-Adjn.(AC)-ST-HYD-GST, dated 29.08.2023, for payment of Rs. 17,24,965/- without issuing a show cause notice to the petitioner company or its representatives, is illegal, arbitrary, improper, unjust, and in violation of the Finance Act, 1994, Service Tax Rules, 1994, CGST Act, 2017, and the principles of natural justice enshrined in Articles 14, 19, and 21 of the Constitution of India. Petitioner's Contention: The Petitioner argued that no show cause notice was served, violating principles of natural justice and the procedure laid down under Section 73 of the Finance Act, 1994, read with Section 114(1) of the Central Goods and Services Tax Act, 2017. They also pointed to a statement in paragraph 16 of the OIO suggesting written submissions were made, which contradicted the assessment officer's finding of no inclination to file a reply. Respondents' Contention: The Respondents contended that the plea of non-service of the show cause notice was an afterthought, as the Petitioner acknowledged the personal hearing notice via email without raising this issue. They argued that despite service of the personal hearing notice, the Petitioner failed to participate. They also clarified that the statement in paragraph 16 of the OIO was an inadvertent error, as the rest of the order did not reflect any submissions from the Petitioner.