M/S Classic Decorators vs. Assistant Commissioner CGST Division And Ors.

Facts

The petitioner, M/s Classic Decorators, filed a writ petition challenging an order dated December 20, 2022, passed by the Assistant Commissioner, CGST Division. The petitioner had filed service tax returns for periods ending September 30, 2014, and March 31, 2015, and subsequent periods. Investigations were initiated, leading to notices. A demand-cum-show cause notice was issued on December 27, 2019, for ₹6,00,163. Subsequently, another demand-cum-show cause notice was issued on December 17, 2020, under the proviso to Section 73(1) of the Finance Act, 1994, and the matter was transferred for adjudication. The petitioner claims to have filed replies and attended personal hearings. The impugned order dated December 20, 2022, raised a demand of ₹5,19,748, including service tax and penalty.

Held

The Court acknowledged that the petitioner's contention regarding the demand being barred by limitation appeared prima facie merited. However, the Court noted that the petitioner had an equally efficacious alternate remedy available. Therefore, the Court did not consider it appropriate to entertain the writ petition. The petition was disposed of with liberty granted to the petitioner to avail of the alternate remedies. All rights and contentions of both parties were expressly reserved. The Court did not decide the issue of limitation on merits or the petitioner's contestation of the demand on merits.

Key Issues

1. Whether the demand raised in the impugned order dated December 20, 2022, is barred by limitation as stipulated under Section 73(4B) of the Finance Act, 1994? Petitioner's contention: The petitioner argued that the demand was raised beyond the period of one year prescribed under Section 73(4B) of the Finance Act, 1994, making the order time-barred. They contended that the impugned order provided no grounds to indicate why the authority could not pass the order within the stipulated period. Revenue's contention: The revenue, through the impugned order, contended that the proceedings were not time-barred because the enquiry was initiated on February 17, 2017, and the petitioner did not cooperate during the investigation stage, failing to submit proper replies or relevant documents despite repeated letters and summons. This non-cooperation led to the issuance of the show cause notice on December 17, 2020.