Md, M/S.Srinivasa Resorts LTD., Hyderabad vs. Joint Commissioner Of Service Tax, Hyderabad And Anr - Telangana High Court, 27 June 2022

Cause title — parties, addresses and appearances

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Originat Jurisdiction) MONDAY, THE TWENTY SEVENTH DAY OF JUNE TWO THOUSAND AND TWENry TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION NO: 28069 0F 2017 Between: M/s Srinivasa Resorts Ltd.,.6-3-1187 Grand Kakatiya Hoter, Begumpet, Hyderabad- 500016 Represented by its Managrng oireciorVireriJer Mai;;[;i d;i,;;, di;. - Makhan Lal Razdan, a{ed about 5Z iears -'- - - -- AND . ...PET!T|ONER 1. Joint commissioner ojservice Tax, office of the principar commissioner of Service _Tax, Se rvice Tax C om m issio n.i,, ai, f _ s _li37iA, -Sii;;;; ffi ;il' Tower, Red Hills, Hyderabad _ SO0O04. - -' ' ' 2. The_Principal commissioner of service Tax, service Tax commissionerate. 11-5-423t1t11, Siraram prasad Towers, nea Hiris, Hyd;;ab;; _;ottb".i. *, ...RESPONDENTS Petition Under Articre 226 of rhe constitution of rndia praying that in the circumstances stated in the affidavit fired therewith, the High court mav be pl":.:99 to issue an appropriate writ, order or direction pr.ti"uirrf, i, ti,"'ritrr" of Writ of certiorari or any other writ, order or Direction in'ftre nature-ot certiorari under Articre 226 of the constitution of rndia, ,tter cailing-ior-ft," records and proceedings of the case and after examining the regarity, va'iioiiv anu qrgprle_ty thereof be preased to quash order-in-origin at"No oitioti+aiii.idrijc daled 28.02.2017; b) to issue any other writ, ordEr or Direction in tne'naiurJ or mandamus under Articre 226 oI the constitution of rndia re"training 1he Respondents, its agents, servants and subordinates from trf.ing an, ;oErciu. action to recover service 1ax pyr_syrlt to the lmpugned Order_In-Oiigr"l No 07 12017 -Adjn.(ST)JC dated 28.02.2017 |.A.NO:1 OF 2017tWPMP. NO: 34880 0F 2017) Petition Under Section 151 cpc praying that in the circumstances stated in the affidavitfiled in support of the peiitio;, itu Hign Court may-Oe;6;;i" grant stay of all further proceedings pursuant to the rmpugn"o oro"r-in-oiiginur I \ No. 0l'l2017- Adjn (ST)JC dated 2802'2017 passed by the Respory".l.l No:1 and any proceedings pursuant thereto pending disposal of the Writ Petition as otn"*i't" the Petiti6ner will be put to severe loss and hardship' .A.NO:1 OF 20'19 Joint commissioner of service Tax, office of the PrincrPal commissioner of 3"ir# ill,t"tic. rii cormLiionerate, I 1 -5 -423t 1 t A: sitaram Prasad iower, Red Hi ls, Hyderabad - 500004' The Principal Oommissioner of Service Tax, Sgrvicg Tax Commissionerate' t'i:djJiiini. siiiil, pt".io rowers, Red Hills, Hvderabad - 500 004' ...PETITIONERS/RESPONDENTS AND M/s. Srinivasa Resorts Ltd., 6-3-1 187 Grand Kakatiya Hotel' Begumpet' Hyderabad- iiiioof o nlor"."ni"A Uv its Managing Director Virender Makan Lal Razdan, S/o. Makhan Lai Razdan, aged about 52 years' ...RESPONDENT/RESPONDENT PetitionUndersectionl5lCPcprayingthatinthecircumstancesstated in the affidavit filed in support of the peiition, [ne Uigtr 9991-rn"y be pleased to vacate tne interim o'der d1.22.8.2017 in W P'No.28069 of 2018' Counsel for the Petitioner : SRI.M'V.J.K'MURTHY CounselfortheRespondents:SRI.A'RAMAKRISHNAREDDY(SCFORCBEC)

The Court made the following ORDER 1 2 / I

I / THE HON'BLE SRI JUSTICE UJJAL AND THE HON'BLE MRS JUSTICE ALLI NANDA 1I'RIT oN No.2ao69of 20L7 ORDER: (Pet tt@ Hon'ble Si JLtstice Ujjal Bhuy@n) Heard Mr' M'V'J'K'Murthy' learned counsel for the petitioner, and Mr' A'Rama counsel for the respondents' Krishna ReddY, learned

By filing this petition under Article 226 of the Constitutionoflndia,petitionerseeksquashingoforder-in-' original dated 28'02'2017 passed by the respondent No'1 under Section 65 of the Finance Act' 1994 ' The challenge has been made on the ground of violation of principles of natural justice.

By the order-in-original dated 28'O2'2017 respondent No.1 confirmed the following demand:- i) Rs.7,86,890'OO including education cess and secondary & higher education cess for the period from 1

UBJ & SN'J tL'P.No.28069 of )017 2Ol1-12 to 2014-15 in terms of Section 73(2) of the Finance Act, 1994; ii) Rs.4,87,091.00 on account of cenvat credit altegedly availed of irregularly on renting of immovable property during the period from April, 2013 to March' 2015. iii) Rs.5,03,938.00 being cenvat credit irregularly availed of during the period from April, 2013 to March' 2015 etc.

In ad<lition, respondent No. 1 imposed per-ralties of Rs. 1,46,39,366.00 and Rs.24,66,252'00 for alleged various contraventions under Section 78 of the Finance Act, 1994'

It maY be mentioned that prior to passing of the a-foresaid order show cause notice dated 19' 12'2016 was issued by respondent No. I to which petitioner {iled reply'

Learned counsel for the petitioner has drawn our attention to the notice dated' 17.02.2017 issued by office of respondent No.l informing the petitioner that personal ,hearing in connection with the show cause notice dated ) \ I I I i llt.P. No.28069 of 2017 19.12.201.6 was fixed on three dates i.e., 23.02.20LT, 28.Q2.2017 arrd 03.03.2OL7 at 11.30 AM. petitioner was further informed that it should appear before respondent No.1 for personal hearing on any one of the dates mentioned above to represent its case in person or through counsel clarifying that no further extension of time would be granted. He has highlighted the expression "on any one of the dates mentioned above,, and submits that petitioner had the option to appear for personal hearing on any one of the three dates so mentioned. But before the petitioner could avail the opportunity of personal hearing on O3.O3.2O17, the impugned order came to be passed on 28.02.2017. This, he contends, is violative of the principles of natural justice. He has also referred to Section 33A of the Central Excise Act, 1944 which is made applicable to the Finance Act, 1994 by virtue of Section g3 thereof and submits that due opportunity of hearing should be granted to a party though adjournments should not be granted beyond three times. He has a_lso referred to a Division Bench decision of Gujarat High court in Regent

L'4./ rt .St\.r Ll'. P. N'o.28069 t{201? Overseas Pvt. Ltd., v. Union of Indiar and submits that Gujarat Hign Court has taken the stand that it is not permissible for the adjudicating authority to lssue one consolidated notice fixing three dates of hearing '/hether such three dates are sought for or not by the party. Since .rdjudicating authority has given choice of three dates of lersonal hearing, the adjudicating authority is required to adhere to the schedule of dates and couid not have llron ouncecl the order-in-original before exhaustion of all 1-he three dates.

Mr. A.Rama Krishna Reddy, learned counsel for the l'espondents, has referred to the counter affidavit filed on behalf of the respondents and submits that as per record, petitioner farled to appear on the second date i.e., on 28.02.2017 , whereafter the case was decided ex parte based on the written reply of the petitioner. The date, 03.03.2017, was erroneously mentioned due to a typographical error. That apart he has also referred to a circular dated 10.O3.2017 issued by the Central Board of -+ I ' (2017) 47 GSTR 233 (cuj) I W. P.No.28069 cf 2017 Indirect Taxes and Customs providing for three personal hearings and submits that the said circular has only prospective effect and does not have retrospective effect' He has also placed before us a number of judgments including Union of India v. Zalcoa Electronicsz on the basis of which he contends that when there is a-lternative remedy available or is provided by the statute, entertaining a writ petition against a primary order would be a wrong approach on the part of the High Court' According to him' petitioner has the remedy of filing further appeal before the Commissioner under Section 35F of the Central Excise Act' 1944 read with Section 85 of the Finance Act, 1994' B

We have considered the rival submissions made at the bar. g. There is no dispute to the proposition that when the statute provides for a remedy, ordinarily a writ court would be reluctant to entertain a writ petition' However' there are well recognized exceptions to the above rule of self- imposed limitation' One such weli recognized exception is ) '2010 (2ss) E.L.T.49o (s.c.) i I I

I 6 L-;B.I & SNJ Ll.P.No.28069 of20t7 violation of the principres of na,turar justice. If there is violation of rhe principles of natural justice, the writ court may still entertain a petitiorr under Articl e 226 0f the Constitution of India notrvithstancling availabilitv of alternative remedly.

10.

Having noted the above, we may advert to the personal hearing notice dated 17.O2.2O12. Since respondents have now stated that mentioning of the third date is a typographicai error, it would be appropriate to extract the same in its entirety. Notice dated t7.O2.2OlZ reads as under:_ "To M/ s.Siniuctsct Resorts Ltd., 6 3-11 87, (jrand. Kakotigo Hotet, Begumpet, Hyderabad SOOOO16. Su,ir ?:y,: ,", Non pagment ol Seruice Tax by M/ s.Sriniuasct Resorts Ltd. - Intimation of Personal Hearing * Reg. Ref: Show cause Notice St.No.64/ 201S_ADC No.O1/2017 - Adjn-ST(JC) dt. 1s.12.2oj6 (oR Pleose refer to the SlTou Cause Notice cited aboue. 1 ," trtis regard, I am d.trected bg the Joint Commissioner of Seraice Tax, Seruice Tox Commissionerate, :yle:abad :o infonn you thot the personat Heaing in the aboue case hts beenfaed qllLSO.!!A on h" 1",.*,iig'art"", I ll. P.No.28069 of20l7 (i) 2s.o2.20 77 (iil 24.o2. 77 (iii) o3.o3.2O77

You are therefore requested to appeor before the Jolnt Commissioner, Servlce Ta)c Commissionerate, H. No' 7 7- 5' 423/1/A, 7"t Floor, Sitaram Prq.sad. Towers, Red Hills, Lakdi Ka Poot, Hyderabad on ang one of the dates mentioned" aboue, to represent gour case in person and/ or through Counsel. No further extension of time uill be giuen under any circumstances.

In case if gou fatl to appear before the Jotnt Commissioner on the soid date and time, it tttould' be construed thqt Aou do not wish to be heard in person" the same would be taken into record. qnd Vour case witl be decided ex-parte baslng on the merits and the mateial euidence auailable on record' Yours faithfutlg, (T.v.RAO) SUPDRINTENDENT (ADJNT

11.

From the above it is seen that the personal hearing was in connection with the show cause notice issued to the petitioner on lg.12.2016. Three dates of personal hearings were mentioned and it was stated in paragraph 3 that petitioner could appear on any one of the dates mentioned either in person or through counsel. Beyond the three dates mentioned above, no further extension of time would be given. 7 I

L|BJ & SNJ ll/. P. No.28069 of2A17

12.

We h;rve carefully gone through the notice dated 17.02.2017. To our mind stand taken by the respondents that mentioning of the third date of hearing i.e., 03.03.2017 is a typographical error does not appeal to us. It is clear as day iight that the intention of the respondent No.1 was to provide personal hearing on either of the three dates. If the respondents had provided three dates with the option to the petitioner to avail any one of the dates for personal he;rring, then respondents ought to have waited for the last date so mentioned in the notice dated 17.02.2017 which is 03.03.2017. Abrupt passing of the order-in-origina-1 on 28.02.2017 without waiting for the petitioner to avail personal hearing on 03.03.20 17 and proceeding ex parte on 28.O2.2017 has vitiated the impugned order-in-original.

13.

Considering the above, we set aside the order dated 28.02.2017. It is open to the respondents to pass fresh order(s) in accordance with law. Needless to say, before passing fresh order due notice as well as opportunity of \ hearing shall be granted to the petitioner. E \

UBJ & SN.I W. P. No 2t1069 of l0 l7

14.

Writ petition is accordingly allowed. i5. Miscellaneous applications pending, if any, shall stand closed. However, there shall be no order as to costs. .T.KIRSHNA KUMAR DEPUry REGIST //// SECTION OFFICER 6.O spare copy

The Joint Commissioner of Service Tax, Hyderabad, Office of the Principal Commissioner of Service Tax, Service Tax Commissio neate, 1 1 -S4Z3i 1 I A Sitaram Prasad Tower, Red Hills, Hyderabad - 500004. 2. The Principal Commissioner of Service Tax, Service Tax Commissionerate, 11-542311111, Sitaram Prasad Towers, Red Hills, Hyderabad - 500 004. 3. One CC to SRI.BATTU SRINIVASA RAO, Advocate [OPUC]

One CC to SRI.A.RAMA KRISHNA REDDY (SC FOR CBEC) Advocate loPUCl

Two CD Copies 9 "I To S.A SB /

HtciH couR'r DA'[ED:2710612022 ORlDER WP.No.28069 of 2017 ALLOWING THE W.P WITHOUT COSTS. i E L-A/^r, .9/ d. .s 69o + F ; rt o t!) a \\ 1) .':; , .a c, ),o>>= ,.-=a==- :,.