Khajamalaivijay S vs. The Joint Commissioner Of CGST And Central Excise

Facts

The petitioner, Khajamalaivijay S, filed a writ petition challenging an Order in Original No. 66/2022-ST dated 13.10.2022, passed by the Joint Commissioner of CGST and Central Excise (1st Respondent). The order was passed under Section 73(1) of the Finance Act, 1999, alleging suppression of turnover. The petitioner claims non-service of notices and lack of knowledge of the ex-parte order until recovery proceedings were initiated. The petitioner contends that the entire turnover is exempted under Notification No. 25/2012-ST and that the order erroneously included turnover beyond the limitation period. The respondents assert that notices were dispatched to the petitioner's last known address and that the petitioner failed to inform of any address change or provide proof of exemption.

Held

The Court, considering the rival submissions, found merit in the petitioner's prima facie plea regarding exemption under Mega Exemption Notification No. 25/2012 dated 28.06.2012 and the petitioner's inability to participate in the proceedings. The Court also took into account the submission that receipts prior to the limitation period were included. Consequently, the Court decided to grant an opportunity to the petitioner. This opportunity was conditioned upon the deposit of 15% of the disputed tax amount within four weeks. Upon such deposit, the impugned order would be set aside, and the matter remitted to the Superintendent of CGST and Central Excise (2nd Respondent) for fresh consideration from the stage of personal hearing. The petitioner would be entitled to file their reply and documents, and the respondent would pass orders afresh. The Court clarified that if the petitioner proves their case, the deposited amount can be adjusted for other years. The issue of whether the entire turnover was indeed exempted or if the notices were properly served was not definitively decided but was to be re-examined by the respondent.

Key Issues

1. Whether the impugned Order in Original No. 66/2022-ST dated 13.10.2022, passed ex-parte, is liable to be quashed on the grounds of non-service of notices and violation of principles of natural justice, as argued by the petitioner? 2. Whether the petitioner is entitled to an opportunity to present evidence of exemption under Notification No. 25/2012-ST, as claimed by the petitioner? 3. Whether the impugned order erred in including turnover beyond the limitation period for computation of liability, despite the show cause notice seeking to restrict it, as contended by the petitioner? Petitioner's Arguments: The petitioner argued that notices were not served, leading to an ex-parte order. They claimed the entire turnover is exempted under Notification No. 25/2012-ST and sought an opportunity to present this evidence. Furthermore, the petitioner argued that even though the order was meant to be restricted to the limitation period, the entire turnover was considered, which is incorrect. Respondents' Arguments: The respondents contended that all notices were dispatched to the petitioner's address via registered post with acknowledgment due. They argued that it is the assessee's responsibility to inform of any address change and that the petitioner failed to claim exemption and produce supporting documents. They also noted the writ petition was filed belatedly.