Haldia Nirman Projects P. LTD. And Anr. vs. Adg, Dg Of Goods And Services Tax Intelligence, Kol. Zonal Unit And Ors.
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The appellants, Haldia Nirman Projects Private Limited and another, filed an intra-court appeal against an order dated 13.04.2023 passed by a learned Single Bench. The Single Bench had dismissed their writ petition, holding that the impugned order was a speaking order. The order challenged in the writ petition was an order in original dated 7th February, 2023, passed by the Commissioner of Central Tax CGST & CX, Haldia Commissionerate. This order was appealable under Section 35B of the Central Excise Act, 1944, read with Section 174(2) of the CGST Act, 2017, before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The appellants argued that the adjudicating authority failed to address their preliminary objection regarding the invocation of the extended period of limitation and did not follow the directions in Circular No.185/4/2015-S.T.
Held
The Court held that the grounds canvassed in the appeal and the writ petition were not pure questions of law but mixed questions of fact and law. Specifically, whether the reasoning provided by the adjudicating authority concerning the invocation of the extended period of limitation was sufficient could not be adjudicated solely through affidavits in a writ petition. The Court noted that the Tribunal, under Section 35B of the Act, possesses wide powers to re-examine the factual position and is the last fact-finding authority, capable of calling for records and examining all details. Therefore, the Court concluded that when an effective and efficacious alternative remedy is available under the Act, the appellant should not be permitted to bypass it, especially on grounds involving mixed questions of fact and law. Accordingly, the appeal was dismissed, granting liberty to the appellant to challenge the order dated 7th February, 2023, before the learned Tribunal. The period from the filing of the writ petition until the receipt of the server copy of the High Court's order was to be excluded for limitation purposes, and the Tribunal was directed to grant an additional 15 days from the receipt of the server copy for filing the appeal.
Key Issues
1. Whether the learned Single Bench erred in dismissing the writ petition on the ground that the impugned order was a speaking order, despite the adjudicating authority allegedly failing to deal with the preliminary objection regarding the invocation of the extended period of limitation? (Mixed question of fact and law, concerning the sufficiency of the adjudicating authority's reasoning and adherence to procedural requirements). Petitioner/Appellant's Contentions: - The adjudicating authority failed to record any finding on the correctness of invoking the extended period of limitation, despite the appellants' detailed submissions and reliance on case law. - The department failed to follow the directions in Circular No.185/4/2015-S.T. regarding manual scrutiny of service tax returns. - Various other issues were raised concerning the show cause notice and the reply given by the assessee. Revenue/State's Contentions: - Not recorded in the judgment.
Sections Cited
Section 35B, Section 174(2)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
speaking order.
What was challenged before the learned Writ Court is an order in original dated 7th February, 2023 passed by the Commissioner of Central Tax CGST & CX, Haldia Commissionerate. Admittedly, the order impugned in the writ petition was an
2 appealable order under Section 35B of the Central Excise Act, 1944 read with Section 174(2) of the CGST Act, 2017 and such appeal would lie before the Customs, Excise and Service Tax Appellate Tribunal, New Delhi.
The learned advocate for the appellants would vehemently contend that the preliminary objection raised by the appellants in the reply to the show cause notice with regard to invocation of the extended period of limitation has not been dealt with by the adjudicating authority and in this regard the learned advocate elaborately referred to the submissions made by the assessee before the adjudicating authority to demonstrate that the adjudicating authority though has extracted the submissions in its entirety along with the decisions which were relied upon no finding has been recorded as to the correctness of invoking the extended period of limitation. To strengthen the said submission, Paragraph 4.8 of the adjudication order dated 7th February, 2023 was referred to. It is further submitted that all other factual details were fully explained and if the department has to resort to detail manual scrutiny of the service tax returns, it is required to follow the directions issued by the Board in Circular No.185/4/2015-S.T. dated 30.06.2015 more particularly Para 5.2 of the said Circular which
3 has not been followed by the department. Apart from that various other issues were also pointed out with regard to the allegation in the show cause notice and as to what is the nature of reply given by the assessee etc. Our attention has also drawn to the communication sent by the Superintendent CGST & CX dated 17.08.2018. 4. We have heard the submissions of the senior Standing Counsel for the respondents.
Admittedly, the grounds which have been canvassed before us in this appeal as well as in the writ petition are not pure questions of law. But mixed questions of fact and law. Whether the reasoning given by the adjudicating authority while considering the issue relating to invoking extended period of limitation is sufficient or not in the facts and circumstances cannot be adjudicated by way of affidavits in a writ petition. Apart from that the power given to the tribunal under Section 35B of the Act is wide enough to re-examine the factual position and the tribunal being the last fact finding committee can call for records, examine all details and take a decision in the matter. Therefore, we are of the view that when such an effective and efficacious alternative remedy is available under the Act the appellant should not be allowed to bypass such remedy more particularly on the grounds which
4 have been canvassed in the writ petition. Therefore, we are of the view that the appellant should avail the alternate remedy under the Act.
Accordingly, the appeal is dismissed giving liberty to the appellant to challenge the order dated 7th February, 2023 before the learned tribunal. The period during which the writ petition was filed and till the receipt of the server copy of this order shall be excluded for the purpose of computing limitation while filing the appeal. If the appellant chooses to avail such appellate remedy, then the learned tribunal shall grant 15 days more time from the date of date of receipt of the server copy of this order while computing limitation.
With the above observation, the appeal is dismissed.
(T. S. SIVAGNANAM)
ACTING CHIEF JUSTICE
(HIRANMAY BHATTACHARYYA, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.