M/S Ramniwas Agarwal And Sons(HUF) vs. The Union Of INDIA And 4 Ors

Facts

The petitioner, M/s Ramniwas Agarwal and Sons (HUF), received a Demand-cum-Show Cause Notice dated September 29, 2020, from Respondent No. 4, demanding service tax of Rs. 1,18,59,175/- for services rendered between October 1, 2014, and June 30, 2017. Respondent No. 3 confirmed this demand by invoking Section 73A of the Finance Act, 1994, through an Order-in-Original dated March 28, 2022. The petitioner appealed this order on May 25, 2022. The appellate authority dismissed the appeal on August 8, 2023, stating that the petitioner did not appear for the hearing despite multiple opportunities. The petitioner contended that they did appear and filed written submissions, and were denied a personal hearing.

Held

The Court held that the appellate authority failed to adhere to the principles of natural justice. The Court found that a reasonable opportunity of hearing, which encompasses consideration of written submissions and an opportunity to be heard in person, was not granted to the petitioner/appellant. The appellate order's assertion that the petitioner did not appear was contradicted by the respondents' admission that the petitioner had filed a response and appeared in the proceedings. Consequently, the Court interfered with the appellate order on the ground of non-adherence to natural justice. The Court directed the petitioner to appear before the appellate authority on November 4, 2026, for a hearing, after which the appellate authority is to pass a speaking appellate order. The Court explicitly stated that this order does not comment on the merits of the claims.

Key Issues

1. Whether the appellate authority erred in dismissing the petitioner's appeal by observing that the petitioner did not appear for the hearing, contrary to the petitioner's claim of appearing and filing written submissions, and thus violating the principles of natural justice? (Mixed question of law and fact, concerning principles of natural justice and procedural fairness under the Finance Act, 1994). Petitioner's arguments: The petitioner argued that the appellate order's observation that no one appeared for the appellant was factually incorrect. They asserted that they were personally present on the date of hearing and had filed their written submissions. Furthermore, they specifically requested a personal hearing, which was not granted. They relied on the mandate for a reasonable opportunity of hearing, which includes consideration of written statements and an opportunity to be heard in person. Revenue's arguments: The respondents, through their Standing Counsel, admitted that the petitioner had filed a response in the appeal and appeared in the appellate proceedings. However, they maintained that no personal hearing was granted.