Vishnuraj Jeyachandran vs. The Deputy Commissioner Of CGST And Central Excise

Facts

The petitioner, a contractor with the PWD Department of Tamil Nadu, filed a writ petition challenging an order dated 06.01.2022 issued by the Deputy Commissioner of CGST and Central Excise, Madurai II Division. This order demanded service tax along with penalty for services rendered by the petitioner. The petitioner contended that the order was passed without issuing a show cause notice and without providing an opportunity for a personal hearing. Furthermore, the petitioner received the impugned order only on 03.02.2024, after their bank accounts were attached by the Superintendent of CGST & Central Excise. The petitioner sought to quash the order as arbitrary, illegal, and against the principles of natural justice.

Held

The Court disposed of the writ petition by granting liberty to the petitioner to file a statutory appeal before the concerned Appellate Authority within four weeks from the date of receipt of a copy of the order. The Court directed the Appellate Authority to consider the appeal expeditiously in light of the orders passed by the Madras High Court and the Supreme Court. The Court did not decide on the merits of the petitioner's claim regarding the violation of natural justice principles. The reasoning was based on the precedent set by the Division Bench and confirmed by the Supreme Court, which advised parties in similar situations to pursue the statutory appellate remedy. The operative direction was to allow the petitioner to file the appeal, subject to the stipulated time frame.

Key Issues

1. Whether the impugned order demanding service tax and penalty is liable to be quashed on the grounds of violation of principles of natural justice, specifically the absence of a show cause notice and personal hearing, as per Article 226 of the Constitution of India. Petitioner's Arguments: The petitioner argued that the order was passed in violation of natural justice principles, as no show cause notice was issued, and no opportunity for personal hearing was provided. They relied on the grievance that the order was furnished only after bank accounts were attached, highlighting the procedural unfairness. Respondents' Arguments: The respondents did not present specific arguments against the petitioner's claims of procedural violation. Instead, they referred to a Division Bench order of the Principal Seat of the Madras High Court in W.P.No.24996 of 2019, dated 30.11.2022, which was subsequently confirmed by the Supreme Court in SLP (C) Nos.7181 to 7199 of 2023, dated 10.04.2023. This order directed similar contractors to approach the appellate authority.