M/S Tsr Resources Private Limited vs. The Commissioner Of Central Tax

Held

The Court held that the Order-in-Original dated 02.03.2022 was passed without serving the mandatory show cause notice on the petitioner, thus violating the principles of natural justice. The Court acknowledged the submission by the respondent's counsel that the show cause notice could not be served. Consequently, the Court set aside the impugned Order-in-Original. The matter was remanded to Respondent No. 1 for a fresh decision in accordance with the law. The Court directed that the copy of the Order-in-Original served on the petitioner be treated as a notice to show cause. The petitioner was granted three weeks to submit a reply, after which Respondent No. 1 would proceed to pass an appropriate order after affording a personal hearing. This entire exercise was to be completed within three months from the receipt of the petitioner's reply. The Court explicitly stated that no decision on merits was made and all contentions were kept open. The Court also clarified that if the petitioner fails to submit a reply, Respondent No. 1 would be at liberty to pass an appropriate order.

Facts

M/s TSR Resources Private Limited (Petitioner) filed a writ petition challenging an Order-in-Original dated 02.03.2022, passed by the Commissioner of Central Tax (Respondent No. 1). The order pertained to the period from 2015-16 to June 2017 and was issued under the provisions of the Finance Act, 1994. The Petitioner contended that the show cause notice preceding this order was never served upon them, rendering the impugned order illegal and violative of natural justice. The Court had previously directed the respondents not to take coercive steps and to obtain instructions. During the subsequent hearing, the respondent's counsel conceded that the show cause notice dated 30.12.2020 could not be served on the petitioner.

Key Issues

1. Whether the Order-in-Original dated 02.03.2022, passed by the Commissioner of Central Tax, is liable to be quashed on the grounds of non-service of the preceding show cause notice, thereby violating the principles of natural justice and Articles 14, 19(1)(g), and 265 of the Constitution of India? Petitioner's arguments: The Petitioner argued that the entire adjudication process was vitiated due to the non-service of the show cause notice, which is a fundamental requirement for passing any order. They asserted that this failure amounts to a violation of the principles of natural justice and constitutional provisions. Respondents' arguments: The respondents, through their counsel, conceded that the show cause notice dated 30.12.2020 could not be served upon the petitioner. They did not present any arguments against the petitioner's contention regarding non-service.