M/S Capital Enterprises And Anr vs. The Union Of INDIA And 2 Ors

Facts

M/s Capital Enterprises and its proprietor, Mrs. Senbom Taipodia, are the petitioners. The respondent authorities are the Union of India, the Principal Commissioner of Central GST, and the Superintendent (Adjudication), Central GST, Guwahati. The dispute concerns a Demand-cum-Show cause notice dated October 21, 2019, for non-payment of service tax amounting to Rs. 2,32,70,459/-. An order in original was passed on February 16, 2021. The petitioners filed a writ petition challenging this order, despite having a remedy of appeal. The core of the issue revolves around the service of a notice for personal hearing dated February 2, 2021, which the respondents claim was duly served, while the petitioners dispute this.

Held

The Court held that the principles of natural justice mandate that a reasonable opportunity must be given to a person before any action is taken against them. The Court was of the opinion that an effective hearing is a component of natural justice. The non-service of the notice dated 02.02.2021, for which there was no proof of delivery, deprived the petitioner of an effective personal hearing. Taking note of the submission by the learned Standing Counsel for Central GST that there is no proof of delivery of the subsequent notice, and to meet the ends of justice, the Court directed the petitioner to appear before Respondent No. 2 (Principal Commissioner) on or before June 27, 2025. Upon appearance, Respondent No. 2 may grant a personal hearing on that date or fix another date for hearing. The writ petition was disposed of with these observations.

Key Issues

1. Whether the notice dated 02.02.2021 for personal hearing was duly served upon the petitioner, thereby satisfying the principles of natural justice? This issue turns on the interpretation and application of principles of natural justice concerning the service of statutory notices. The petitioner argues that the notice dated 02.02.2021 was not effectively served, as there is no proof of delivery, specifically no registered post acknowledgment or postal delivery report. They contend that this lack of proof deprives them of an effective personal hearing. The revenue, represented by the GST authorities, initially contended that the notice was duly served as it was sent to the same address where a previous notice dated 11.01.2021 was delivered. However, during the court's inquiry, the revenue conceded that there is no proof of delivery for the subsequent notice dated 02.02.2021.