Goverdhan Reddy Pasam vs. The Deputy Commissioner Of Central Tax And Another

Facts

The petitioner, Goverdhan Reddy Pasam, a doctor, challenged an Order-in-Original dated March 4, 2022, passed by the Deputy Commissioner of Central Tax. The petitioner's grievance was that despite appearing before the respondent on February 28, 2022, and submitting a letter and email, these submissions were not considered before the order was passed. Consequently, the impugned order was issued ex parte. The tax period under consideration was April 2015 to June 2017. The petitioner sought a writ of mandamus to declare the action illegal and arbitrary, and also sought a stay on further proceedings. The respondents, represented by the Deputy Commissioner of Central Tax and the Superintendent (Adjn), agreed to set aside the order and remand the matter.

Held

The Court held that the Order-in-Original dated March 4, 2022, passed by the Deputy Commissioner of Central Tax, was to be set aside. The Court found merit in the respondents' submission that the matter should be remanded back to the first respondent. The reasoning was based on the fact that the petitioner's submissions were allegedly not considered, leading to an ex parte order. The Court agreed that the petitioner should be given an opportunity to be heard afresh. The ratio decidendi is that an order passed without considering the submissions of the affected party, especially when they have appeared and submitted their response, violates principles of natural justice and warrants a remand. The Court directed the first respondent to pass a fresh order after considering the petitioner's reply dated February 28, 2022, and after providing an opportunity for a personal hearing. This exercise was to be completed within two months from the date of receipt of the order. The Writ Petition was allowed, with no order as to costs.

Key Issues

1. Whether the Order-in-Original dated March 4, 2022, passed by the Deputy Commissioner of Central Tax, is illegal and arbitrary for being passed ex parte without considering the petitioner's submissions, thereby violating principles of natural justice, as contended by the petitioner? Petitioner's Contention: The petitioner argued that the impugned order was passed arbitrarily and illegally by the first respondent. The petitioner claimed to have appeared in person and filed a letter and email on February 28, 2022, which were not considered by the respondent before passing the order. This failure to consider the petitioner's submissions resulted in an ex parte order, violating the principles of natural justice and the provisions of the service tax statute. The petitioner relied on the general principles of natural justice. Revenue's Contention: The respondents, through their learned counsel, submitted that the Order-in-Original could be set aside and the matter remanded back to the first respondent. They agreed to hear the petitioner afresh and consider the reply dated February 28, 2022.