Bhoopal Reddy Annepally vs. The Commissioner

Facts

The petitioner, Bhoopal Reddy Annepally, challenged an Order-in-Original dated November 7, 2022, passed by the Commissioner of Central Tax, Ranga Reddy GST Commissionerate. This order confirmed a service tax demand of Rs. 3,00,12,594.00 for the tax periods from 2015-16 to June 2017, under the Finance Act, 1994. The petitioner contended that the order was passed beyond the limitation period prescribed under Section 73(8) of the Finance Act, 1994, and contrary to the proviso to Section 73(1). Alternatively, the petitioner argued that the order was passed without providing an adequate opportunity for a personal hearing, violating principles of natural justice. The notice for personal hearing dated November 1, 2022, was received by the petitioner on November 16, 2022, which was after the date of the personal hearing and after the issuance of the impugned order.

Held

The Court held that the impugned Order-in-Original dated November 7, 2022, was passed without providing an adequate opportunity of personal hearing to the petitioner. The Court noted that the notice for personal hearing dated November 1, 2022, was received by the petitioner on November 16, 2022, which was after the scheduled hearing date and after the issuance of the order. The Court found that there was no finding recorded by the respondent that the show cause notice or the intimations for virtual personal hearing were served on the petitioner. The Court referred to its earlier decision in WPMP No. 30500 of 2020, emphasizing that mere issuance of notices is insufficient; the Assessing Officer must record a finding that notices were served and the assessee failed to appear despite service. Since such a finding was absent, and to serve the interest of justice, the Court set aside the order and remanded the matter back to the file of Respondent No. 1. The petitioner was directed to appear before Respondent No. 1 on October 5, 2023, for recommencing proceedings from the stage of pre-personal hearing. All contentions were kept open. The issue regarding the limitation period was not expressly decided.

Key Issues

1. Whether the Order-in-Original No. Hyd-Excus-004-Com-034-2022-23, dated 07.11.2022, imposing service tax for the period 2015-16 to June 2017, was passed beyond the limitation period prescribed under Section 73(8) of the Finance Act, 1994, and contrary to the proviso to Section 73(1) of the Finance Act, 1994? 2. Whether the impugned order was passed without providing an adequate opportunity of personal hearing to the petitioner, thereby violating the principles of natural justice? Petitioner's arguments: The petitioner argued that the impugned order was time-barred as it was passed after the expiry of the limitation period under Section 73(8) of the Finance Act, 1994. Furthermore, the petitioner contended that the notice for personal hearing was received after the scheduled date and after the order was passed, rendering the opportunity for hearing illusory and violating principles of natural justice. The petitioner relied on a previous decision of the High Court in WPMP No. 30500 of 2020 (M/s. Sai Constructions v. Assistant Commissioner of Central Tax). Respondents' arguments: The respondents submitted that the notice of personal hearing issued to the petitioner was returned undelivered, and thereafter, the respondent proceeded ex parte. They did not present any arguments regarding the limitation period.