M/S Maurya Enterprises House No. 89 Chattarpur Rudrapur vs. Additional Commissioner Central Excise And Service Tax

Held

The Court held that despite the repeal of the Finance Act, 1994, by Section 174 of the CGST Act, 2017, the petitioner retains the right to pursue appellate proceedings. The Court relied on Section 174(2)(c) of the CGST Act, 2017, which explicitly saves any right, privilege, obligation, or liability acquired, accrued, or incurred under the repealed Act. The Court reasoned that this saving clause encompasses the tax liability imposed under the Finance Act, 1994, and therefore preserves the petitioner's right to appeal. The Court further noted that Section 174(3) of the CGST Act, 2017, emphasizes the general application of Section 6 of the General Clauses Act, 1897, reinforcing the continuation of such rights. Consequently, the Court found that the order of the Joint Commissioner dated December 31, 2015, remains appellable under Section 84 of the Finance Act, 1994. The writ petition was dismissed, but with liberty reserved for the petitioner to avail the appellate remedy.

Facts

The petitioner, M/s Maurya Enterprises, a sole proprietorship, was issued a Show Cause Notice on September 30, 2014, by the Additional Commissioner, Central Excise and Service Tax, Meerut-II, under the Finance Act, 1994. The petitioner did not participate in the proceedings, leading to an ex parte order on December 31, 2015, imposing a demand of Rs. 37,22,254/- along with interest and penalties. Subsequently, with the introduction of the CGST Act, 2017, the petitioner's CGST registration was suspended due to being identified as a defaulter. The petitioner filed a writ petition on December 5, 2021, challenging the 2015 ex parte order. The petitioner claimed knowledge of the tax dues only through a notice dated August 9, 2021, issued by respondent No. 3 regarding the cancellation of their CGST registration.

Key Issues

1. Whether the repeal of the Finance Act, 1994, by Section 174 of the CGST Act, 2017, affects the petitioner's right to appeal against the order dated December 31, 2015, passed under the Finance Act, 1994? Petitioner's contention: The petitioner argued that the ex parte order was challenged belatedly as they only gained knowledge of the tax dues through a subsequent notice regarding CGST registration cancellation. The petitioner implicitly argued that the repeal of the Finance Act, 1994, should not extinguish their right to challenge the impugned demand. Respondents' contention: The respondents argued that Section 174(2)(c) of the CGST Act, 2017, saves rights, privileges, obligations, or liabilities acquired or incurred under the repealed Act. They contended that this saving clause includes the tax liability and consequently protects the petitioner's right to prefer an appeal under Section 84 of the Finance Act, 1994, before the Commissioner of Central Excise. They further argued that Section 6 of the General Clauses Act, 1897, also supports the continuation of such rights.