M/S. Sri Jayanth Engineering Company vs. Commissioner Of Central Taxes

Facts

M/s. Sri Jayanth Engineering Company (Petitioner) filed a writ petition challenging an order dated 01.11.2022 passed by the Commissioner of Central Tax (Respondent). The impugned order confirmed a demand of Rs. 2,13,62,311/- raised by the Assessing Authority, along with interest and penalty. The tax period under consideration was 01.04.2016 to 30.06.2017, and the order invoked provisions of the Finance Act, 1994, for levying service tax. The Petitioner contended that the order was passed without proper service of the show-cause notice and without affording a fair opportunity of hearing, violating principles of natural justice. The Respondent conceded that the show-cause notice and the notice for personal hearing were not served on the Petitioner.

Held

The Court held that the impugned order dated 01.11.2022 deserved to be set aside because it was passed without granting an opportunity of personal hearing to the Petitioner. The Court noted the Respondent's concession that the show-cause notice and the notice for personal hearing were not served on the Petitioner. The Court also referred to paragraph 5 of the impugned order, which indicated that the Petitioner had not attended the personal hearing, but the Respondent's counsel admitted that the service of the notice for personal hearing was not effected. The Court found this situation to be a violation of the principles of natural justice. Consequently, the Court set aside the impugned order and directed that the impugned order itself be treated as a notice for personal hearing. The Petitioner was directed to appear before the original adjudicating authority on 08.09.2023, with the option to file a reply to the show-cause notice. The authority was then to pass appropriate orders after providing an opportunity of hearing. The Writ Petition was allowed.

Key Issues

1. Whether the impugned order dated 01.11.2022, passed by the Commissioner of Central Tax, is liable to be set aside for non-service of the show-cause notice and denial of personal hearing to the Petitioner, thereby violating the principles of natural justice under Article 14 of the Constitution of India? Petitioner's Arguments: The Petitioner argued that the impugned order was passed without affording a fair and reasonable opportunity of hearing, as the show-cause notice was not served, preventing them from responding. They relied on the fact that the Respondent's counsel conceded non-service of the show-cause notice and the notice for personal hearing. Respondent's Arguments: The Respondent's counsel fairly submitted that the show-cause notice was, in fact, not served upon the Petitioner and conceded that the notice for personal hearing was also not served. The Respondent did not oppose the Petitioner's request for remanding the matter back to the adjudicating authority for personal hearing.