Chandrachud Dhondiram Dhorkule vs. Union Of INDIA Through Its Joint Secretary And Another

Facts

The Petitioner, Chandrachud Dhondiram Dhorkule, proprietor of Texmo Customer Services, filed a writ petition challenging an order dated 28.03.2024 passed by the Principal Commissioner of CGST & C.Ex., Nagpur-I. The dispute pertains to service tax and cess liability for the period October 2015 to March 2016 and the financial year 2016 to 2017, amounting to Rs. 3,29,60,809/-. The Petitioner received a show cause notice dated 21.04.2021 and submitted a reply. The department conceded that an order was not passed within the statutory period of one year from the date of the reply. Subsequently, the Petitioner received multiple notices for personal hearing, all scheduled for virtual mode, but was not provided with the necessary video conferencing link. Despite repeated requests and attempts to communicate via WhatsApp video, the Petitioner could not participate in the virtual hearings. The impugned order was then passed without the Petitioner's effective participation.

Held

The Court held that the Petitioner was indeed denied a proper opportunity of hearing. The repeated failure to provide a video conferencing link for the scheduled virtual hearings, despite the Petitioner's requests and attempts to communicate, violated the principles of natural justice. The Court acknowledged the Petitioner's grievance that they were unable to participate in the proceedings. While noting the Petitioner's direct approach to the High Court and the delay in filing an appeal before the CESTAT, the Court, in light of the peculiar facts and to meet the ends of justice, decided to entertain the petition. The Court set aside the impugned order dated 28.03.2024 and directed a re-hearing before the Principal Commissioner. As a condition for this re-hearing, the Petitioner was directed to deposit 5% of the assessed service tax amount within 30 days. The re-hearing was scheduled for 11.09.2024 at 3:00 p.m. in physical form, allowing the Petitioner to present physical documents and legal assistance. The Court stipulated that if the deposit is not made or if the Petitioner remains absent, the impugned order would stand restored. The concerned authority was directed to follow due procedure and pass a reasoned order after the hearing.

Key Issues

1. Whether the Petitioner was denied a proper opportunity of hearing before the impugned order dated 28.03.2024 was passed, violating principles of natural justice, particularly concerning the failure to provide a video conferencing link for scheduled virtual hearings. Petitioner's Arguments: The Petitioner argued that despite receiving multiple notices for virtual hearings, the department failed to provide the necessary link, effectively denying them a chance to be heard. They contended that their attempts to communicate this issue were unsuccessful, leading to an ex-parte order. Revenue's Arguments: The Revenue contended that the Petitioner's reply to the show cause notice was casual, lacking requests for physical or virtual hearings or witness presentations. They argued that the department issued further notices for personal hearing only due to the lapse in passing the order within the statutory period. They also pointed out that the Petitioner approached the High Court directly instead of filing an appeal before the CESTAT, as mandated by Section 86 of the Finance Act, 1994, and that the petition was filed beyond the prescribed 90-day period for appeal, though the Tribunal has the power to condone delay.