M/S.Datum Cybertech INDIA Private Limited vs. Union Of INDIA

Facts

M/s. Datum Cybertech India Private Limited (Petitioner) filed a writ petition challenging an Order-in-Original (OIO) dated 04.03.2022, issued by the Commissioner of Central Tax, Ranga Reddy GST Commissionerate (Respondent No. 2). The OIO confirmed a demand of Rs. 2,19,21,767.00 under Section 73(2) of the Finance Act, 1994, along with interest and penalty. The Petitioner contended that the show cause notice dated 28.12.2020, alleging non-payment of service tax for the period 2015-2016 to 2017-2018 (up to June 2017), was never served upon them, thus violating principles of natural justice. The Petitioner highlighted that the impugned order itself noted that the personal hearing intimation sent to the assessee was returned undelivered.

Held

The Court held that the Order-in-Original dated 04.03.2022 was to be set aside. The primary reason for this decision was the Petitioner's contention, which was not disputed by the respondents, that the show cause notice and subsequent personal hearing intimation were not effectively served upon the Petitioner, leading to a violation of the principles of natural justice. The Court acknowledged the respondents' submission that the matter could be heard afresh. Consequently, the Court remanded the matter back to Respondent No. 2 for a fresh decision in accordance with the law. The Petitioner was directed to treat the impugned order as a notice to show cause and submit a reply within three weeks. Respondent No. 2 was then to proceed with the adjudication after affording a personal hearing to the Petitioner, with the entire exercise to be completed within three months of the Petitioner's reply. The ratio decidendi is that a demand confirmed without proper service of notice and an opportunity for a hearing violates natural justice principles, necessitating a remand for a fair adjudication.

Key Issues

1. Whether the Order-in-Original dated 04.03.2022, issued by Respondent No. 2, is illegal, arbitrary, and violative of the principles of natural justice, specifically concerning the non-service of the show cause notice dated 28.12.2020, as contemplated under Section 73 of the Finance Act, 1994? Petitioner's Arguments: The Petitioner argued that the impugned order is vitiated by a violation of natural justice because the show cause notice dated 28.12.2020 was not served upon them. They relied on the fact that the impugned order itself acknowledged that the intimation for personal hearing was returned undelivered, indicating a failure in the communication process. Respondents' Arguments: The learned counsel for the respondents fairly conceded that since the Petitioner is now aware of the show cause notice, the matter could be heard afresh by Respondent No. 2.