Dulal Chandra Mech vs. The Union Of INDIA And Ors

Facts

The petitioner, Dulal Chandra Mech, an assessee with Service Tax Registration No. ADBPM1713EST001, was issued a Demand Cum-Show Cause Notice dated 24.08.2019 under Section 73(1) of the Finance Act, 1994. This notice pertained to financial years 2014-15, 2015-16, and 2016-17, proposing a recovery of Rs. 32,18,849/- along with interest and penalty. A previous writ petition filed by the petitioner challenging this notice was dismissed for want of prosecution on 12.04.2023. Subsequently, the petitioner received a notice for personal hearing on 20.02.2024, filed a reply, and an Order in Original dated 28.06.2024 was passed, confirming a demand of Rs. 19,60,023/- including cess.

Held

The Court held that it would not exercise its power under Article 226 of the Constitution of India. The Court noted that the Order in Original is an appealable order and that there was no violation of principles of natural justice, no acting without jurisdiction by the authority, and no violation of any fundamental right of the petitioner. Consequently, the Court found that an efficacious and alternative remedy of appeal was available to the petitioner. The Court did not decide on the merits of the petitioner's contentions regarding the violation of Section 73(4B), Clause 14.10 of the Master Circular, or the absence of determination under Section 73(2). The operative direction was to relegate the petitioner to approach the appellate authority as per law, with the periods spent before the High Court to be excluded from the prescribed period of limitation.

Key Issues

1. Whether the Order in Original dated 28.06.2024 was passed in violation of Section 73(4B) of the Finance Act, 1994, which mandates that the order ought to be passed within one year? 2. Whether Clause 14.10 of the Master Circular bearing No. 1053/02/2017-CX F.No.96/1/2017-CX.I dated 10.03.2017 was violated, specifically concerning the communication of the decision beyond the prescribed time after the hearing concluded? 3. Whether there was an absence of determination as required under Section 73(2) of the Finance Act, 1994, rendering the recovery of service tax under Section 73(1) invalid? Petitioner's arguments: The petitioner contended that the Order in Original violated Section 73(4B) of the Finance Act, 1994, as it was not passed within the stipulated one-year period. They also argued that Clause 14.10 of the Master Circular was breached due to the delayed communication of the decision post-hearing. Furthermore, the petitioner claimed an absence of determination under Section 73(2) of the Finance Act, 1994, asserting that service tax could not be recovered under Section 73(1) in such circumstances. Revenue's arguments: The respondent GST authorities argued that the impugned order is appealable, suggesting that the writ petition is not the appropriate remedy.