M/S Swastik Enterprise Through Its Partner Roushan Singh vs. Principal Commissioner Central Goods And Service Tax And Central Excise

Held

The Court held that the impugned ex-parte Order-in-Original No. 08/ST/Pr.Commr./2023 dated 27/29.03.2023, passed by the Principal Commissioner, Central Goods & Service Tax, Ranchi, imposing a penalty of Rs.4,42,11,398/-, cannot be sustained. The Court found merit in the petitioner's contention that they were not served with the show-cause notice dated 29th of September 2020, nor any subsequent notices for personal hearing, as evidenced by the dispatch register produced by the respondents. This non-service constituted a gross violation of the basic principles of natural justice and fair play. Consequently, the Court quashed and set aside the impugned order and any consequential orders. The matter was remitted back to the Adjudicating Authority to decide the case afresh. The parties were directed to appear before the Adjudicating Authority on 11th September 2025, and the Adjudicating Authority was directed to decide the case expeditiously, in any event, by 31st of December 2025. The issue regarding the exemption under Notification No. 25/2012-ST and the mutual exclusivity of VAT and Service Tax was not expressly decided as the matter was remanded.

Facts

M/s. Swastik Enterprise, a partnership firm, filed a writ petition challenging an ex-parte Order-in-Original No. 08/ST/Pr.Commr./2023 dated 27/29.03.2023, passed by the Principal Commissioner, Central Goods & Service Tax, Ranchi. The petitioner contended that the order was passed in violation of principles of natural justice as no show-cause notice dated 29.09.2020, nor any subsequent notices for personal hearing, were served upon them. Furthermore, the petitioner argued that no service tax was payable for the financial years 2014-15 and 2015-16 on work executed for the Road Construction Department of the State of Jharkhand, as it was exempted under Sl. No. 13 of Notification No. 25/2012-ST dated 20.06.2012. The petitioner also highlighted that they paid Value Added Tax (VAT) on their entire turnover and had TDS deducted by the principal employer, asserting that VAT and Service Tax are mutually exclusive.

Key Issues

1. Whether the ex-parte Order-in-Original No. 08/ST/Pr.Commr./2023 dated 27/29.03.2023, passed by the Principal Commissioner, Central Goods & Service Tax, Ranchi, is liable to be quashed and set aside on the ground of violation of principles of natural justice, specifically concerning the non-service of the show-cause notice dated 29.09.2020 and subsequent notices for personal hearing upon the petitioner? (Question of law) 2. Whether the petitioner is liable to pay service tax for the financial years 2014-15 and 2015-16 on the work executed for the Road Construction Department of the State of Jharkhand, considering the applicability of Mega Exemption Notification No. 25/2012-ST dated 20.06.2012 and the fact that VAT was paid on the entire turnover and TDS was deducted by the principal employer? (Question of mixed law and fact) Petitioner's Arguments: The petitioner argued that the impugned order was passed without jurisdiction as vital facts were not considered, specifically the non-receipt of the show-cause notice and subsequent notices for personal hearing. They also contended that no service tax was payable due to exemption under Notification No. 25/2012-ST and the principle of VAT and Service Tax being mutually exclusive. They relied on the fact that VAT was paid on the entire turnover and TDS was deducted. Respondent's Arguments: The judgment does not record any specific arguments made by the respondent. However, the respondent produced the dispatch register as directed by the Court.