K. Janakiraman vs. The Assistant Commissioner Of GST And Central Excise

Facts

The petitioner, K. Janakiraman, aged 81 and suffering from cancer and other ailments, filed two writ petitions. The first, W.P.(MD)No.3360 of 2025, sought a refund of tax, penalty, and interest recovered from his bank account pursuant to an Order-in-Original (No.16/2024-R, dated 11.12.2024) passed by the Assistant Commissioner of GST and Central Excise. The second, W.P.(MD)No.22328 of 2025, challenged an Order-in-Appeal (No.46/2025-TRY-ST-APP, dated 31.03.2025) passed by the Commissioner of GST and Central Excise (Appeals), which rejected his appeal against the Order-in-Original as barred by limitation. The petitioner contended that the show cause notice was issued during the COVID-19 pandemic, and due to his health condition, he could not respond effectively, leading to an ex parte order. He only became aware of the order when recovery proceedings were initiated.

Held

The Court held that while the failure to respond to the show cause notice was attributable to the petitioner, the peculiar facts and circumstances, including the issuance of the notice during the COVID-19 pandemic, the petitioner's advanced age, and his suffering from cancer and other ailments, warranted granting one more opportunity. The Court noted that the entire tax and penalty amounts had already been recovered. However, the Court ruled that the petitioner could not, at this stage, seek a direction for refund of the amounts already recovered. The entitlement to any refund or reimbursement would necessarily depend on the outcome of a fresh adjudication. Consequently, the Court set aside both the Order-in-Original dated 24.08.2022 and the Order-in-Appeal dated 31.03.2025, and remanded the matter to the first respondent for fresh consideration. The petitioner was directed to submit his reply to the show cause notice within three weeks, after which the first respondent would afford a personal hearing and adjudicate the matter afresh. The question of refund would be considered based on the outcome of this fresh adjudication.

Key Issues

1. Whether the Appellate Authority erred in rejecting the petitioner's appeal as barred by limitation, considering the petitioner's age, health condition during the COVID-19 pandemic, and his claim of not being aware of the Order-in-Original until recovery proceedings commenced? (Question of law and fact, concerning principles of natural justice and limitation provisions). 2. Whether the petitioner is entitled to a refund of the amounts recovered, given that the very basis of the demand (the Order-in-Original) is under challenge? (Question of law, concerning the consequences of setting aside an assessment order). Petitioner's arguments: The petitioner argued that the Appellate Authority should have considered his circumstances, including his age and health during the pandemic, and that the limitation period should commence from the date of knowledge of the order. He also contended that if the demand is challenged, the recovered amount should be refunded. Revenue's arguments: The Revenue argued that the show cause notice was duly served, the petitioner failed to reply or attend personal hearings, and thus the order attained finality. They asserted that the petitioner failed to substantiate his claim and that the Appellate Authority was justified in rejecting the appeal as time-barred. They further contended that once the assessment order attained finality, no refund would arise.