M/S Seelam Ramakrishna Reddy Shivarudrappa vs. The Additional Commissioner Of Central Tax And Central Excise

Facts

The petitioner, M/s. Seelam Ramakrishna Reddy Shivaruadrappa, filed a writ petition challenging a show cause notice (SCN) dated 28.12.2020, issued by the Joint Commissioner of Central Tax and Central Excise, Belagavi, and an order-in-original dated 26.04.2024 passed by the Additional Commissioner of Central Tax and Central Excise, Belagavi. The SCN was reportedly based on information from the Income Tax Department. The petitioner argued that the order-in-original was passed after a significant delay following the SCN. The petitioner relied on a coordinate bench's order in a similar batch of writ petitions (WP No. 11154/2023) which had quashed the order-in-original and relegated the petitioner to the show cause notice stage.

Held

The Court allowed the writ petition. It quashed the order-in-original dated 26.04.2024 passed by the Additional Commissioner of Central Tax and Central Excise, Belagavi. The Court's decision was based on the precedent set by a coordinate bench in Writ Petition No. 11154/2023, which dealt with a similar batch of cases. Following that precedent, the Court found it appropriate to quash the order-in-original. The petitioner was relegated back to the authorities concerned, with liberty to file their pleadings within a reasonable time to be fixed by the concerned officers. The ratio decidendi is that in cases with significant procedural delays leading to the passing of an order-in-original, and where a coordinate bench has set a precedent to quash such orders and remand to the show cause notice stage, the High Court will follow that precedent to ensure consistency and fairness. No specific issue was left undecided.

Key Issues

1. Whether the order-in-original dated 26.04.2024, passed by the Additional Commissioner of Central Tax and Central Excise, Belagavi, is liable to be quashed on the grounds of procedural delay and in light of a coordinate bench's decision in similar matters? (Question of law and mixed fact and law, turning on principles of natural justice and administrative efficiency). The petitioner contended that the order-in-original was passed on 26.04.2024, significantly after the show cause notice dated 28.12.2020. They relied on the decision of a coordinate bench of the High Court in Writ Petition No. 11154/2023, which quashed the order-in-original in similar circumstances and relegated the petitioner to the show cause notice stage, keeping all contentions open. The respondents (The Additional Commissioner and Joint Commissioner of Central Tax and Central Excise) did not record any specific arguments against quashing the order-in-original in the judgment.