Flemingo Dutyfree Shop PVT LTD And Anr vs. The Deputy Comm. Of Revenue Salt Lake City Charge And Ors

Held

The Court allowed the appeal, setting aside the order of the learned Single Bench and the adjudication order dated April 8, 2024, passed under Section 73(9) of the Act. The matter was restored to the stage of the show-cause notice dated December 5, 2023. The Court reasoned that while the appellants' non-compliance was noted, the principle laid down in M/s. Radhasoami Satsang, Saomi Bagh, Agra v. Commissioner of Income Tax was applicable. This principle suggests that if a fundamental aspect has been decided in a particular way for a previous period and that position has been allowed to be sustained, it would not be appropriate to change it in a subsequent year, especially when the facts are identical. The Court found that for the assessment year 2017-2018, on identical facts, the department had dropped the demand, and those proceedings had attained finality. To maintain consistency, the Court decided to grant one more opportunity to the appellants to present their case before the authority, emphasizing that they must establish similarity to the 2017-2018 case. The appellants were directed to submit their reply within 15 days, after which the adjudicating authority would fix a personal hearing and pass fresh orders on merits within four weeks of the hearing's conclusion.

Facts

The appellants, Flemingo Dutyfree Shop Pvt. Ltd. & Anr., filed an intra-Court appeal challenging an order of the learned Single Bench dated August 28, 2024. The Single Bench had directed the appellants to exhaust their appellate remedy under Section 107 of the WBGST Act/CGST Act, 2017, instead of entertaining their writ petition. The writ petition had challenged an adjudication order passed under Section 73 of the Act on April 8, 2024, for the tax period April 2018 to March 2019. The adjudication order was passed ex-parte because the appellants did not file a reply to the show-cause notice, nor did they appear for the personal hearing, citing intervening circumstances beyond their control and the consultant's failure to act.

Key Issues

1. Whether the appellants should be granted an opportunity to present their case before the adjudicating authority, despite failing to appear for the personal hearing and file a reply to the show-cause notice, given that a similar issue for a previous tax period was decided in their favour? Petitioner's Arguments: The appellants contended that in their own case for the assessment year 2017-2018, on identical facts, the revenue authorities had dropped the proceedings after being satisfied with their explanation. They argued that due to intervening circumstances beyond their control, their consultant failed to take adequate steps, leading to an ex-parte order. They sought one more opportunity, characterizing their prayer as a mercy petition. They relied on the Supreme Court decision in M/s. Radhasoami Satsang, Saomi Bagh, Agra v. Commissioner of Income Tax, to argue that if the department adopted a favourable stance in a previous year on similar facts, it should do so in a subsequent year, provided the earlier order remained unchallenged. Revenue's Arguments: The respondents were not recorded as having made specific arguments against granting an opportunity, other than the fact that the adjudication order was passed on best judgment basis due to the appellants' non-compliance.