Dr.Sunil Kumar Padhi vs. The Chief Commissioner, GST And Central Excise, Bhubaneswar

Facts

The Petitioner, Dr. Sunil Kumar Padhi, a medical professional, filed a writ petition challenging an Order-in-Original and a preceding Demand-cum-Show Cause Notice. The notice, issued on 09.09.2020, was based on third-party data from CBDT regarding gross receipts of Rs. 10,48,726/- for FY 2014-15. The Assistant Commissioner proceeded on a best judgment basis under Section 72 of the Finance Act, 1994, applying 12.36% tax without abatement, and invoking the extended period under Section 73(1) for alleged suppression. The Petitioner claimed he never received the notice or subsequent intimations due to residing at a different address, only learning of the proceedings on 20.07.2026 when his bank account was being attached. The Order-in-Original, dated 13.02.2024, was passed ex-parte, imposing tax, interest, and penalties.

Held

The Court held that the writ petition was maintainable, citing the Supreme Court's decisions in Whirlpool Corporation and Radha Krishan Industries, as the challenge involved questions of jurisdiction and violation of natural justice. Regarding limitation, the Court found that the notice issued on 09.09.2020 for FY 2014-15 was barred by limitation under Section 73(4B), as the adjudication period of one year from the notice date (09.09.2021) had long expired. The significant delays in fixing hearing dates, particularly the 14-month gap between November 2022 and February 2024, were attributed to the Revenue and fell foul of Section 73(4B). The Court also held that the Order-in-Original was unsustainable because it failed to consider the exemption for healthcare services provided under Notification No.25/2012-ST, which was applicable to the Petitioner's profession as a medical practitioner. The order treated the Petitioner's silence as an admission without proper inquiry, reflecting a non-application of mind and a breach of natural justice. Consequently, the Court quashed both the Demand-cum-Show Cause Notice and the Order-in-Original, and directed the withdrawal of any coercive steps and refund of any amounts recovered. The Court explicitly stated that a remand would be futile given the limitations and expired adjudication period.

Key Issues

1. Whether the writ petition is maintainable despite the availability of an alternative remedy of appeal under Section 85 of the Finance Act, 1994, given the alleged violation of natural justice and lack of jurisdiction? (Petitioner: Yes, citing Whirlpool Corporation and Radha Krishan Industries, as the order is without jurisdiction and in breach of natural justice. Revenue: No, as an efficacious remedy of appeal exists and disputed questions of service should be decided there.) 2. Whether the Demand-cum-Show Cause Notice dated 09.09.2020, issued for FY 2014-15, is barred by limitation under Section 73(1) and Section 73(4B) of the Finance Act, 1994? (Petitioner: Yes, the notice is barred by limitation, especially considering the delay in adjudication. Revenue: No, the delay was partly due to the pandemic, and the extended period was rightly invoked.) 3. Whether the Order-in-Original correctly determined the tax liability without considering the exemption for healthcare services under Notification No.25/2012-ST dated 20.06.2012 and treating the Petitioner's silence as admission? (Petitioner: No, the order failed to consider the exemption and wrongly interpreted silence as admission. Revenue: Not explicitly argued, but impliedly the order was justified.)