Mohan Rao Sandra vs. The Assistant Commissioner Of Central Tax

Held

The Court held that the impugned order of assessment was passed in violation of the principles of natural justice. The Court noted that while the assessing officer referred to the petitioner's letter dated 21-10-2021, he did not refer to the petitioner's subsequent reply dated 12-10-2023, which sought an adjournment. The order was passed on the premise that the petitioner had not responded to notices for personal hearing, despite the authority having received the request for adjournment. Therefore, the petitioner was not afforded an adequate opportunity to place material in support of his contentions. The Court relied on previous judgments in Recon Oil Industries (P) Limited and Sri Gowtham Educational Society, where orders passed without considering requests for time and without an opportunity for personal hearing were quashed. The Court allowed the writ petition, setting aside the assessment order and directing the respondents to pass fresh orders after affording the petitioner an opportunity to submit objections and in accordance with the law within three months.

Facts

The petitioner, Mohan Rao Sandra, filed a writ petition challenging an assessment order dated 31-10-2023, passed by the Assistant Commissioner of Central Tax (1st respondent). The petitioner contended that the order was passed without jurisdiction and was barred by limitation. A show cause notice dated 21-10-2021 was issued for the periods 2016-17 and 2017-18, proposing to levy service tax, interest, and penalty. The petitioner claimed he could not respond due to post-COVID health issues and sought time to reply via a letter dated 12-10-2023. He also stated he did not receive subsequent notices dated 23-01-2023, 22-02-2023, and 15-03-2023. The petitioner had previously informed the authorities that service tax was not leviable on the transactions as services were rendered to an SEZ unit. The respondents argued that the petitioner failed to pay service tax and respond to notices, and that an appeal to the appellate authority was the proper remedy, making the writ petition not maintainable.

Key Issues

1. Whether the assessment order dated 31-10-2023, passed by the 1st respondent, was issued without jurisdiction and is barred by limitation, specifically concerning the applicability of the extended period of limitation under Section 73 of the Finance Act, 1994? The petitioner argued that the extended period of limitation would not apply. 2. Whether the assessment order was passed in violation of the principles of natural justice, specifically by not affording the petitioner an adequate opportunity to present his case and material in support of his contentions? The petitioner contended that he did not receive all notices and that his request for time to reply was not granted, preventing him from submitting his defense. The respondents argued that the petitioner failed to avail the statutory remedy of appeal and that the writ petition was therefore not maintainable.