Suresh Kumar Reddy Medipalli vs. Commissioner Of Central Tax

Facts

The petitioner, Suresh Kumar Reddy Medipalli, challenged an order-in-original dated November 2, 2022, passed by the Commissioner of Central Tax (Respondent No. 1). This order confirmed a demand for service tax and interest and imposed a penalty. The petitioner approached the High Court via a writ petition, arguing that the show cause notice dated October 7, 2017, was never served. The respondents admitted in the order-in-original that the intimation for personal hearing sent to the petitioner was returned undelivered by postal authorities, indicating no notice of hearing was served. The petitioner sought to declare the order void, illegal, and violative of natural justice and constitutional provisions.

Held

The Court set aside the impugned order-in-original dated November 2, 2022, passed by Respondent No. 1. The Court reasoned that the admitted fact of the personal hearing intimation being returned undelivered constituted a clear violation of the principles of natural justice. The Court treated the order-in-original as a notice to show cause for the petitioner. The petitioner was directed to submit a reply within three weeks. If a reply was filed, Respondent No. 1 was to pass a fresh order in accordance with law after granting the petitioner an opportunity of hearing, including a personal hearing. If no reply was filed, Respondent No. 1 was at liberty to pass an order deemed fit and proper. The writ petition was disposed of accordingly.

Key Issues

1. Whether the order-in-original dated November 2, 2022, passed by the Commissioner of Central Tax is void, illegal, and arbitrary for violating the principles of natural justice, specifically concerning the non-service of the show cause notice and personal hearing intimation upon the petitioner, as contemplated under the Finance Act, 1994? Petitioner's Contention: The petitioner argued that the show cause notice dated October 7, 2017, was not served. Furthermore, the order-in-original itself admitted that the personal hearing intimation was returned undelivered, leading to a clear violation of the principles of natural justice. Respondents' Contention: The learned counsel for the respondents fairly submitted that in identical matters, this Court had remanded the matter back to the original authority for a fresh decision in accordance with law.