M/S.Envytee Info Solutions Private Limited. vs. The Assistant Commissioner

Facts

The petitioner, M/s. Envytee Info Solutions Private Limited, filed a writ petition challenging an Order-in-Original No. 210/2023-ST dated 23.10.2023, passed by the Assistant Commissioner (1st Respondent) for the tax period 2016-17. The petitioner contended that the order was passed without providing an opportunity of being heard, violating principles of natural justice. The impugned order levied Service Tax of Rs. 14,37,627/-, interest, and a penalty of Rs. 14,37,627/-. The petitioner also argued that the order was barred by limitation and passed without jurisdiction. The order was served on the petitioner on 12.01.2024. The petitioner sought to set aside the order and suspend its operation pending disposal of the writ petition.

Held

The Court held that there was no cogent and sufficient material on record to demonstrate that the show cause notice and the notices for personal hearing were effectively served upon the petitioner. Consequently, the impugned order dated 23.10.2023 was set aside and quashed on the ground of violation of the principles of natural justice. The matter was remitted back to the 1st Respondent for passing a fresh order after providing an opportunity of hearing to the petitioner. The Court directed that the impugned order dated 23.10.2023 itself could be treated as a show cause notice, and the petitioner was directed to appear before the 1st Respondent on 21.03.2024 by submitting their reply. The assessing officer was then to proceed further and pass a fresh order on its merits. No fresh notice was to be issued by the 1st Respondent for the petitioner's appearance on 21.03.2024. The Court explicitly stated it was not expressing any opinion on the merits of the case.

Key Issues

1. Whether the impugned Order-in-Original No. 210/2023-ST dated 23.10.2023, passed for the tax period 2016-17, is liable to be set aside on the ground of violation of the principles of natural justice, specifically for not providing the petitioner with an adequate opportunity of being heard? (Question of law and fact, concerning principles of natural justice and procedural fairness). Petitioner's Contentions: The petitioner argued that they were not served with any show cause notice or any notice for personal hearing, thereby being deprived of a fair defense. They contended that the impugned order must be set aside solely on the ground of violating principles of natural justice. Respondents' Contentions: The respondents (Assistant Commissioner and Superintendent) produced a copy of an email sent to the petitioner regarding the show cause notice and correspondence indicating notices for personal hearing dated 25.08.2023, 07.09.2023, and 18.09.2023. However, they admitted that they did not have conclusive proof of effective service of these notices and could not ascertain from tracking the speed post whether it was effectively served upon the petitioner.