M/S Services International vs. Union Of INDIA And Ors

Facts

The petitioner, M/s Services International, challenged an order dated April 18, 2024, which disposed of a Show Cause Notice (SCN) dated December 6, 2023. The SCN proposed a demand of Rs 3,86,25,289.00 against the petitioner for the Financial Year 2018-19 and included a penalty. The petitioner had requested an adjournment on January 6, 2024, due to their accountant's illness, but received no confirmation regarding the acceptance or rejection of this request. Subsequently, the impugned order was passed without further notice. The impugned order itself noted the petitioner's adjournment request and alleged non-appearance and lack of documents, deeming the reply devoid of merit.

Held

The Court held that in the peculiar facts and circumstances, it would be in the interest of justice to grant the petitioner an opportunity to respond to the Show Cause Notice. The impugned order dated April 18, 2024, was set aside. The matter was remitted to the Proper Officer for re-adjudication, and the SCN was restored to the file of the Proper Officer. The petitioner was directed to file a reply to the SCN within 30 days. Subsequently, the Proper Officer was to re-adjudicate the SCN after providing an opportunity of personal hearing and pass a fresh speaking order in accordance with law within the period prescribed under Section 75(3) of the Act. The Court clarified that it had not considered or commented upon the merits of either party's contentions, reserving all rights and contentions. The challenge to Notification No. 9 of 2023 regarding the initial extension of time was left open.

Key Issues

1. Whether the impugned order dated April 18, 2024, passed under Section 73 of the Central Goods and Services Tax Act, 2017, is vitiated by a procedural irregularity, specifically the failure to grant a proper opportunity for a hearing after the petitioner requested an adjournment. Petitioner's Arguments: The petitioner contended that they requested an extension to file a reply to the SCN due to their accountant's illness. They did not receive any communication regarding the status of their adjournment request and were surprised by the immediate passing of the impugned order. They argued that they should be granted one opportunity to file a reply and have the SCN adjudicated in accordance with law. This argument was made without prejudice to their challenge to Notification No. 09/2023. Revenue's Arguments: The judgment records that the respondents accepted notice and, with consent, the petition was taken up for final disposal. No specific arguments were recorded for the revenue regarding the procedural irregularity or the merits of the petitioner's case.