Iyyanan Eswaran vs. The Deputy Commissioner Of CGST And Central Excise

Facts

The petitioner, Iyyanan Eswaran, filed a writ petition challenging an order dated 29.09.2022 passed by the Deputy Commissioner of CGST and Central Excise, Madurai II Division (the first respondent). This order confirmed a demand proposed in a Show Cause Notice dated 22.10.2021, issued by the same authority, in the absence of a reply from the petitioner. The petitioner approached the High Court after a considerable delay. The respondents, represented by the Senior Standing Counsel, argued for dismissal on grounds of laches, citing the petitioner's delay in approaching the court and failure to respond to the Show Cause Notice and the impugned order, both of which were served on the petitioner.

Held

The Court quashed the impugned order dated 29.09.2022 and remitted the case back to the first respondent for a fresh decision. This decision was made conditional upon the petitioner depositing 100% of the disputed tax in cash from their Electronic Cash Register within thirty days of receiving a copy of the order. Additionally, the petitioner was directed to file a reply to the Show Cause Notice dated 22.10.2021, along with supporting documents, within the same period, treating the impugned order as an addendum to the Show Cause Notice. If these conditions were met, the first respondent was to pass a final order on merits expeditiously, preferably within three months of the reply/pre-deposit. The Court noted that if the petitioner failed to comply, the respondents could proceed to recover the tax as if the writ petition was dismissed in limine. The Court also stipulated that due notice must be given to the petitioner before passing any fresh order. The ratio decidendi is that while laches can be a ground for dismissal, a High Court, in its writ jurisdiction, can grant relief by way of remand and fresh consideration, subject to strict compliance with pre-deposit and procedural requirements, to ensure a decision on merits.

Key Issues

1. Whether the impugned order dated 29.09.2022, passed by the first respondent confirming the demand in the absence of a reply to the Show Cause Notice dated 22.10.2021, is liable to be quashed and the case remanded for fresh consideration, considering the petitioner's delay in approaching the court and failure to respond to the notices? Petitioner's Contention: The petitioner sought to quash the impugned order and prayed for the case to be remanded for fresh consideration. The petitioner undertook to deposit 100% of the demanded tax. Revenue's Contention: The respondents argued that the writ petition should be dismissed on grounds of laches due to the petitioner's delay in approaching the court and failure to respond to the Show Cause Notice and the impugned order.