Surya Rao Arshanapally vs. Union Of INDIA

Held

The Court held that the petitioner had not been given a fair and reasonable opportunity of defense before the impugned order was passed on December 31, 2021. This conclusion was reached based on the submission by the learned counsel for the respondents-Department that the notices issued had not been served upon the petitioner, or at least, the departmental files did not reflect such service. Consequently, the Court found the adjudication order to be vitiated by a lack of due process. The Court allowed the writ petition and set aside the order dated December 31, 2021. The matter was remitted back to the respondent No. 4 (Deputy/Assistant Commissioner of Central Tax) for fresh adjudication. The petitioner was directed to appear before the respondent on October 31, 2023, and furnish a reply to the proceedings, after which the respondent would proceed in accordance with law. The ratio decidendi is that an order passed without affording a reasonable opportunity of hearing, due to non-service of notice, is unsustainable in law and liable to be set aside.

Facts

The petitioner, Surya Rao Arshanapally, filed two writ petitions challenging an adjudication order dated December 31, 2021, issued by the Deputy/Assistant Commissioner of Central Tax, Kukatpally Division. This order confirmed a demand of Rs. 43,49,385/- towards service tax for the period 2016-17. The petitioner contended that the adjudication order was passed without proper service of notice and without affording an adequate opportunity of hearing. Specifically, the petitioner argued that notices were sent to an incorrect email address and a wrong postal address (Plot No. 686 instead of Plot No. 868). The respondents' counsel, on instructions, conceded that the department's records did not reflect proper service of notice on the petitioner.

Key Issues

1. Whether the impugned adjudication order dated December 31, 2021, passed by the Deputy/Assistant Commissioner of Central Tax, Kukatpally Division, is illegal, arbitrary, and violative of Articles 19(1)(g), 20, and 21 of the Constitution of India, due to lack of proper service of notice and opportunity of hearing? (Question of law and mixed fact and law, turning on principles of natural justice and procedural fairness). Petitioner's Contention: The petitioner argued that the adjudication order was passed without proper service of notice and without providing a fair opportunity of hearing. Notices were allegedly sent to an incorrect email and a wrong physical address (Plot No. 686 instead of Plot No. 868). This procedural defect rendered the order illegal and arbitrary, violating constitutional rights. Revenue's Contention: The counsel for the respondents, upon instructions, stated that their files did not reflect the proper service of notice on the petitioner, implicitly acknowledging the petitioner's contention regarding non-service.