M/S. Delhi And District Cricket Association vs. Assistant Commissioner Of Central Tax, Delhi North

Held

The Court allowed the writ petition. On the issue of jurisdiction, while not explicitly stated as a separate finding, the Court's decision to set aside the order and grant relief implies a finding that the original adjudicating authority's actions were flawed. Regarding the lack of pre-show cause notice consultation and personal hearing, the Court found it undisputed that no personal hearing was granted before passing the impugned order, which was a procedural flaw. The Court held that the impugned order clearly exceeded the directions of the remand order dated May 30, 2019, which was confined to the refund of cess and interest. Instead of addressing these specific points, the adjudicating authority reopened the entire assessment, which was deemed inexplicable. The Court found no acceptable reason for not refunding the actual excess amount paid towards service tax and cess (Rs. 36,27,615/-). The Court also held that the petitioner was entitled to statutory interest under Section 11BB of the 1944 Act, as there can be no estoppel against a statute, and the communication waiving interest did not bar the claim. The Court directed the respondent to pay interest on Rs. 2,32,09,285/- at 6% p.a. from February 2, 2018, to January 3, 2019, and to remit the excess amount of Rs. 36,27,615/- with simple interest at 6% p.a. from February 2, 2018, till the date of payment.

Facts

The petitioner, M/s Delhi and District Cricket Association, filed a writ petition challenging an Order-in-Original dated June 30, 2020, and a show cause notice dated February 20, 2020, issued by the Assistant Commissioner of GST. The petitioner contended that the impugned order was passed by an officer without jurisdiction, as the demand exceeded Rs. 50,00,000/-. They also argued that no pre-show cause notice consultation or hearing was provided, and the order went beyond the scope of a previous remand order dated May 30, 2019, passed by the Commissioner (Appeals-I). The petitioner further claimed the show cause notice was based on inaccurate facts, specifically regarding the payment of service tax for 'Business Auxiliary Services'. The dispute centers around the refund of excess service tax and cess paid by the petitioner for the periods October 2016 to March 2017 and April 2017 to June 2017.

Key Issues

1. Whether the Order-in-Original dated June 30, 2020, was passed by an officer lacking the requisite jurisdiction, considering the demand exceeded Rs. 50,00,000/-, as per paragraph 11.1 of CBEC circular no. 1053/02/2017-CX dated March 10, 2017? The petitioner argued that only an Additional/Joint Commissioner or Commissioner could adjudicate such demands. The respondent's argument on this point is not recorded. 2. Whether the impugned order and show cause notice were vitiated by the failure to conduct pre-show cause notice consultation and grant a personal hearing, as required by paragraph 5 of the CBEC circular dated March 10, 2017, given the demand exceeded Rs. 50,00,000/-? The petitioner contended this was a mandatory requirement. The respondent's argument is not recorded. 3. Whether the impugned order dated June 30, 2020, exceeded the scope of the remand order dated May 30, 2019, passed by the Commissioner (Appeals-I), which was restricted to the refund of cess and interest? The petitioner argued the adjudicating authority improperly reopened the entire assessment. The respondent's argument is not recorded. 4. Whether the petitioner is entitled to the refund of the excess amount paid towards service tax and cess, specifically Rs. 36,94,642/-, and interest thereon, despite a prior communication stating no interest would be claimed?