Smt Sonia Jajodia, Prop. Of M/S. Amps Fashion vs. Union Of INDIA And Ors.

Facts

The petitioner, Sonia Jajodia, challenged the initiation of recovery proceedings for the financial year 2014-15. She had participated in a proceeding under Section 73 of the Finance Act, 1994, and an order in original was passed on October 25, 2019. The petitioner claimed she was only served with a truncated photocopy of this order via email on August 6, 2022, and subsequent requests for the full order were ignored. This led to a recovery proceeding initiated by the Superintendent of Central Tax on March 8, 2024. The CGST authorities contended that the order was attempted to be served by registered post, which returned with an "insufficient address" endorsement, and also by email on December 20, 2023.

Held

The Court held that the postal endorsement "insufficient address" on the envelope containing the order in original did not raise a presumption of valid service. Furthermore, the Court found that the email communication did not constitute valid service of the order in original, especially in light of Section 37C of the Finance Act, 1994, which prescribes specific methods for service. However, the Court noted that the order in original dated October 25, 2019, was handed over to the petitioner's advocate in court on the date of the hearing. This was construed as a valid service of the order. Consequently, the recovery notice dated March 8, 2024, was directed to be kept in abeyance for 30 days from the date of the order. The respondents were permitted to initiate recovery proceedings after this period or after the expiry of the statutory period, whichever was later. The petitioner was granted liberty to take appropriate recourse against the order in original within the prescribed statutory period.

Key Issues

1. Whether the petitioner was validly served with the order in original dated October 25, 2019, in accordance with Section 37C of the Finance Act, 1994? The petitioner argued that a truncated photocopy served via email did not constitute valid service, nor did the subsequent recovery notice, as it prevented her from availing statutory remedies. She contended that the registered post attempt failed due to an "insufficient address" and that the email service was not compliant with Section 37C. The CGST authorities argued that service was attempted via registered post, which failed due to an insufficient address, and also via email on December 20, 2023, which they considered valid service. They produced records to justify their attempts at service.