M/S. Heera Retail (Hyderabad) Private Limited vs. Commissioner Of Central Tax

Facts

The petitioner, M/s. Heera Retail (Hyderabad) Private Limited, and its Director, challenged an Order in Original (OIO) dated July 6, 2023, issued by the Commissioner of Central Tax, Medchal Commissionerate. The OIO confirmed a demand of Rs. 10,50,96,633/- for central excise duty payable on gross sale consideration for the period March 2016 to June 2017. Additionally, a penalty of Rs. 10,50,96,633/- was imposed for contraventions with intent to evade duty, and a further penalty of Rs. 1 crore was levied on a Director for transporting, removing, depositing, skipping, and selling goods without payment of duty. The petitioner contended that the OIO was passed without providing an effective defense, as crucial documents seized by the department were not made available, and their bank accounts were also seized, preventing pre-deposit for an appeal. The petition was filed on October 10, 2023, after the OIO was passed on July 13, 2023.

Held

The Court dismissed the Writ Petition. The primary reason for dismissal was that the impugned order was passed approximately six months prior to the filing of the writ petition, on July 13, 2023. The statutory period for filing an appeal under Section 35(B)(a) of the relevant Act is three months. The writ petition was filed much after this limitation period had lapsed. Although the petition was initially filed on October 10, 2023, it was returned due to defaults and refiled later. The Court also noted that the petitioner's contentions regarding not manufacturing jewelry and purchasing it from third parties, and the sale of gold and silver coins not manufactured by them, are factual aspects that require thorough examination of records. Such factual disputes cannot be adjudicated in writ jurisdiction under Article 226, which is an extraordinary remedy. The Court also referred to paragraph 7 of the impugned order, which cited a Director's statement accepting the petitioner's engagement in manufacturing gold articles and not being registered with or paying duty to the Central Excise Department. Given these factual complexities and the availability of a statutory alternative remedy of appeal, the Court was not inclined to entertain the writ petition. The right of the petitioner to prefer an appeal in accordance with the provisions of the Act was left open.

Key Issues

1. Whether the impugned Order in Original No. HYD-EXCUS-001-COM-005-23-24 dated 06.07.2023 is arbitrary, without jurisdiction, in violation of principles of natural justice, without authority of law, and violative of Articles 14, 19(1)(g), and 265 of the Constitution of India, and contrary to the Central Excise Act, 1944 and its Rules? 2. Whether the acts and omissions of the 3rd, 4th, and 5th Respondents in not providing documents violate principles of natural justice, and should they be directed to furnish all seized documents, data, and software extracts for proper adjudication? 3. Whether the 1st Respondent should be directed to adjudicate the Show Cause Notice No. 02/2021-22 dated 08.04.2021 only after receiving all data from the 3rd, 4th, and 5th Respondents and granting sufficient opportunity to the petitioners? Petitioner's Arguments: The OIO was passed without an effective defense because essential seized documents were not provided. The seizure of bank accounts prevented the mandatory pre-deposit for an appeal. Revenue's Arguments: Not recorded in the judgment.