Dhanjit Kumar Pathak vs. The Union Of INDIA And 3 Ors

Facts

The petitioner, Dhanjit Kumar Pathak, challenged an Order-In-Original dated 30.03.2023, issued by the Deputy Commissioner of CGST and Central Excise, Guwahati, which confirmed a demand of Service Tax and cess amounting to Rs.16,37,501/- for the financial year 2016-2017. Penalties under Section 77(1)(c) and Section 78(1) of the Finance Act, 1994, were also imposed. The petitioner's primary contention was that this order was passed without serving him a show-cause notice and notices for the hearings. The Court noted that the Order-In-Original itself indicated a show-cause notice dated 22.10.2021 was issued. The Court had requested the respondents to provide proof of service of this notice, which was not done. Both parties jointly submitted that the order be set aside and the matter remanded.

Held

The Court held that the Order-In-Original dated 30.03.2023 was passed without proper adherence to the principles of natural justice, specifically concerning the non-service of the show-cause notice and hearing notices upon the petitioner. The Court noted that despite a specific direction to produce materials demonstrating service of the show-cause notice dated 22.10.2021, the respondents failed to do so. Consequently, the Court found merit in the petitioner's contention that the order was vitiated due to lack of proper procedure. Based on the joint submission of both parties, the Court decided to set aside the impugned order. The matter was remanded back to the Deputy Commissioner, CGST, for fresh adjudication. The Deputy Commissioner is directed to furnish a copy of the show-cause notice dated 22.10.2021 to the petitioner, who will then have 15 days to submit a reply. Thereafter, the Deputy Commissioner shall pass a fresh Order-In-Original after affording the petitioner a reasonable opportunity to present his case. No specific issue was left undecided.

Key Issues

1. Whether the Order-In-Original dated 30.03.2023, confirming a demand of Rs.16,37,501/- and imposing penalties, was passed in violation of principles of natural justice, specifically concerning the non-service of a show-cause notice and hearing notices, as contemplated under Section 73(2) of the Finance Act, 1994? Petitioner's Contention: The petitioner argued that the Order-In-Original was passed without proper service of the show-cause notice dated 22.10.2021 and any subsequent hearing notices, thereby violating the principles of natural justice. The petitioner relied on the absence of proof of service of the show-cause notice by the respondents. Revenue's Contention: The respondents did not present any arguments against the petitioner's claim regarding non-service of notice. They agreed with the petitioner's submission that the matter should be remanded.