Ms Aman Raj Construction Through Its Partner Anil Kumar Singh vs. Principal Commissioner Central Goods And Service Tax And Central Excise

Held

The Court held that the impugned ex-parte Order-in-Original dated 01.02.2022 was indeed hit by the principles of natural justice. The Court noted the admitted position that the Show Cause Notice and notices for personal hearing were served on the Petitioner's advocate, which is not considered valid service under Section 73(1) of the Finance Act, 1994. Furthermore, no Show Cause Notice or notice for personal hearing was served upon the Petitioner at its correct address before passing the ex-parte order. The Court also observed that the impugned order was initially sent to a wrong address and only later delivered to the Petitioner's correct address. Consequently, the Court found the writ petition to be maintainable, citing the judgment in the Whirlpool case. The Court reasoned that the demand was not leviable on the Petitioner due to the procedural lapses. The Court quashed and set aside the impugned order and remitted the matter back to the Additional Commissioner to pass a fresh order after providing a proper opportunity of hearing to the Petitioner in accordance with law and principles of natural justice. The issue of service tax leviability on the PMGSY work was not decided on merits.

Facts

M/s. Aman Raj Construction (Petitioner) filed a writ petition challenging an ex-parte Order-in-Original dated 01.02.2022, passed by the Additional Commissioner, Central Goods & Service Tax, Ranchi (Respondent No. 2). The Petitioner argued that the order was passed in violation of natural justice as no Show Cause Notice (SCN) or subsequent notices for personal hearing were served at its correct address. The Petitioner also contended that no service tax was payable for the period 2014-15 on work executed under the Pradhan Mantri Gram Sadak Yojana (PMGSY) due to exemption under Notification No. 25/2012-ST and because VAT was paid on the entire turnover, with TDS also deducted by the Principal Employer. The Respondent argued that notices were served through registered post and email to an address provided by the Income Tax Department and that the Petitioner had opportunities for personal hearing. The disputed amount of service tax, interest, and penalties was Rs. 76,38,197/-.

Key Issues

1. Whether the ex-parte Order-in-Original dated 01.02.2022, passed by the Additional Commissioner, Central Goods & Service Tax, Ranchi, is liable to be quashed and set aside on the grounds of violation of the principles of natural justice, specifically concerning the non-service of the Show Cause Notice and subsequent notices for personal hearing to the Petitioner's correct address, as per Section 73(1) of the Finance Act, 1994? Petitioner's contention: The Petitioner argued that none of the notices, including the SCN dated 29.09.2020 and subsequent notices for personal hearing, were served at its correct address. The notices were allegedly sent to an advocate's address, while the Petitioner's correct address, as per Form 26AS, was "C/o Anil Kumar Singh, Sahijna, Garhwa-822101". The Petitioner relied on the principle that service on an advocate is not valid service on the assessee under Section 73(1) of the Finance Act, 1994. The Petitioner also cited the Master Circular No. 1053/02/2017-CX regarding pre-consultation show cause notice. Respondent's contention: The Respondent contended that four opportunities for personal hearing were provided, and notices were served through registered post and to an email ID associated with the Petitioner's GSTIN. They asserted that the address used for correspondence was based on available departmental records and data shared by the Income Tax Department, and that the Order-in-Original was served via registered post and delivered to the Petitioner. The Respondent also argued that the Petitioner had recourse to the appellate mechanism under Section 35 of the Central Excise Act, made applicable to service tax matters.