Durga International vs. Commissioner CGST And Anr

Facts

The petitioner, Durga International, challenged an order dated 12.10.2023 passed by the Assistant Commissioner, which confirmed a demand for Service Tax along with interest and penalty. This order was issued despite a previous order by a Co-ordinate Bench of the High Court on 17.04.2023 in CWP-3546-2021. That earlier order had set aside a show cause notice dated 12.01.2021 issued to the petitioner and directed the release of a refund of Rs. 68,756/-. The petitioner had previously requested compliance with the refund order. The respondents placed on record a review order dated 04.01.2024 by the Principal Commissioner, CGST Commissionerate, Ludhiana, which noted these facts and indicated that a review application was filed in the earlier writ petition, adjourned sine-die pending an Apex Court decision. The Principal Commissioner also directed an appeal against the impugned order dated 12.10.2023.

Held

The Court held that the order dated 12.10.2023 passed by the Assistant Commissioner was without jurisdiction. This was because the very show cause notice upon which the order was based had been quashed by this Court in a previous writ petition (CWP-3546-2021) in the presence of counsel for the respondents. Therefore, the subsequent order confirming the demand was a nullity. The Court quashed the impugned order dated 12.10.2023. However, the Court clarified that if the review application filed in the earlier writ petition were to be allowed at a later stage, it would be open to the adjudicating authority to proceed upon the said show cause notice thereafter. The Court also noted that this fact could be brought to the notice of the Division Bench seized of the review application after the Apex Court's decision.

Key Issues

1. Whether the order dated 12.10.2023 passed by the Assistant Commissioner confirming a demand for Service Tax, interest, and penalty is valid when the show cause notice upon which it was based was previously quashed by this Court in CWP-3546-2021 on 17.04.2023. Petitioner's contention: The petitioner argued that the impugned order was passed without jurisdiction as it continued proceedings based on a show cause notice that had already been set aside by a Co-ordinate Bench of this Court. They relied on the previous order directing the release of refund and compliance with law. Revenue's contention: The respondents placed on record a review order by the Principal Commissioner which acknowledged the previous order but noted that a review application had been filed in the earlier writ petition and adjourned sine-die. The Principal Commissioner had directed an appeal against the impugned order and suggested remanding the matter. The respondents did not explicitly argue for the validity of the impugned order but presented the subsequent developments.