HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY
WRIT PETITION NO.28187 OF 2023
ORDER: (per Hon'ble Sri Justice Laxmi Narayana Alishetty)
The present writ petition has been filed to declare the
impugned order-in-original No.26/2022-23(ST), dated 20.06.2022
passed by respondent No.1 and also set aside the demand notice,
dated 07.08.2023 vide reference No.IV/16/01/02/2023 issued under the provisions of Section 87 of the Finance Act, 1994.
2. The brief facts leading to filing of present petition are as under:
3. The petitioner is a company engaged in the business of supply, installation, testing and commissioning of bare chilled/conditioner water piping of M.S.Heavy class complete with fitting etc. The petitioner was registered vide Service Tax registration No.AAICM7663ESD001 under the category of maintenance or repair service under Section 69 of Chapter V of the Finance Act, 1994. The petitioner is an income tax assessee with PAN No.AAICM7663E. The petitioner filed statement of profit and loss for the Assessment Year 2016-17 and 2017-18 declaring PSK,J & LNA,J WP No.28187 of 2023 2 revenue of Rs.24,11,817/- and Rs.2,06,32,665/- respectively and paid VAT and discharged his tax liability.
4. The petitioner received order in original No.26/2022-23, dated 20.06.2022 requesting petitioner to provide certain information and documents pertaining to Financial Years 2015- 16,2016-17 and 2017-18 with regard to the difference in taxable value of ST-3 returns when compared with the value of ITR/TDS for 2015-16 and 2016-17. Vide impugned order dated 20.06.2022, the respondent confirmed demand of service tax of Rs. 30,23,823/- for the period 2015-16 and 2016-17 under Section 73(2) of the Finance Act, 1994 and also raised demand of interest at applicable rates under Section 75 of the Finance Act, 1994 and further imposed penalty of Rs. 30,23,823/- under Section 78 of the Finance Act, 1994 and also imposed penalty of Rs. 10,000/- under Section 77 of the Finance Act,1994. In the impugned order, it was observed that petitioner had failed to discharge service tax liability on services provided and also had willfully suppressed the facts about the taxable services with an intention to evade payment of service tax.
5. It is further contended that the impugned order was received by the petitioner on 13.12.2022, however, due to inadvertence the PSK,J & LNA,J WP No.28187 of 2023 3 same was misplaced by the petitioner. Subsequently, the petitioner came to know about the impugned order only when the bank attachment notice was received by the petitioner on 17.08.2023. Therefore, there is a delay in filing the present writ petition and petitioner prays this Court to condone the delay in the interest of justice. He further contended that show-cause notice, dated 30.12.2020, which was said to have been issued to the petitioner prior to passing of the impugned order was not received by the petitioner.
6. Heard Sri Gadipelli Prahlad, learned counsel representing Sri Karan Talwar, learned counsel for the petitioner and Ms. B.Swapna Reddy, learned counsel representing Sri Dominic Fernandes, Special Standing Counsel for CBIC for respondent Nos.1 & 2 and Sri Gadi Praveen Kumar, Deputy Solicitor General for respondent No.3.
7. Learned counsel for the petitioner submitted that show- cause notice and personal hearing notices were never served on the petitioner and therefore, petitioner could not submit reply to show- cause notice and also could not appear for personal hearing. He further submitted that the impugned order was passed in the absence of petitioner and the petitioner was not extended opportunity of personal hearing in violation of principles of natural justice and thus, the impugned order is vitiated and liable to be PSK,J & LNA,J WP No.28187 of 2023 4 set-aside. Learned counsel for the petitioner relied upon following judgments:
i. Hon'ble Madras High Court in the case of S.Parvathy Sankaran, S.Venkatesam v. The Sales Tax Officer (Circle), The Assistant Commissioner (State Tax), Mettur Road Circle, Erode reported in [2021(21) TMI 62-Madras High Court].
ii.Hon'ble Telangana High Court in the case of M/s.Sai Constructions v. The Assistant Commissioner of Central Tax and 3 Others reported in 2022(12) TMI 1149.
iii.Hon'ble Telangana High Court in the case of B.Rajender Reddy v. The Commissioner of Central Tax, The Union Of India reported in 2023(3) TMI 893.
iv.Hon'ble Madras High Court in the case of Pushpam Reality v. State Tax Officer reported in 2022(3) TMI 86 (Mad.) v.Hon'ble Telangana High Court in the case of Sathavahana Associates v. The Commissioner of Central Tax and others reported in 2022 (7) TMI
342.
8. Learned counsel for the petitioner further submitted that petitioner would be put to hardship and also incur substantial loss, if the impugned order as well as demand notice are not set- aside and thus, prayed to allow the writ petition.
9. Per contra, Ms. B.Swapna Reddy representing Sri Dominic Fernandes, learned counsel for the respondents submitted that show-cause notice was sent to the registered e-mail of the petitioner on 31.12.2020. Therefore, the petitioner cannot agitate that show-cause notice was not served on him. She further submitted that notice for personal hearing was sent on 04.04.2022, 28.04.2022 and 07.05.2022 to the petitioner to attend PSK,J & LNA,J WP No.28187 of 2023 5 the personal hearing and these notices were served on the petitioner. Therefore, the contention of petitioner that no personal hearing was afforded to the petitioner and that the impugned order was passed in the absence of the petitioner is factually incorrect and untenable. She also placed on record, email dated 31.12.2020 by which show-cause notice was sent to the petitioner and also, the track consignment details from India Post portal in proof of service of personal hearing notices.
10. A perusal of the impugned order, dated 20.06.2022 passed by respondent No.1 shows that a letter dated 09.12.2020 was sent to the petitioner to provide following information for the Financial year 2015-16,2016-17 and 2017-18 (up to June, 2017). a.Income Tax returns together with Form 26AS. b.FORM No.3CB (Audit Report U/Sec.44AB of IT Act, 1961 c.Balance Sheet alsong with P&L Account statemtn, schedules, in case of firm/company.
d.Bank Account Statements/Service Income Ledger. e.Bills/Invoices/Contracts/Agreements entered by you with persons/firm/company for provision of any service(s). f.ST-3 Returns.
g.Any other pertinent information/document/record. It appears that petitioner neither responded nor submitted data sought for in the letter, dated 09.12.2020.
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11. It is also evident from impugned order, dated 20.06.2022, the show-cause notice dated 30.12.2020 was issued to the petitioner, but the petitioner did not respond to the show-cause notice. It is also evident that personal hearing was fixed on 05.04.2022, 03.05.2022 and 18.05.2022 and the petitioner was informed to attend personal hearing and also file reply to show- cause notice vide letters, dated 29.03.2022, 25.04.2022 and 06.05.2022 respectively. However, the petitioner failed to respond to the notices issued by the respondent No.1 and therefore, respondent No.1 proceeded with adjudication and passed the impugned order- in-original, dated 20.06.2022.
12. Admittedly, the petitioner received the impugned order, dated 20.06.2022 on 13.12.2022, which is approximately about six (06) months after passing of order. However, the petitioner has not taken any steps to challenge the impugned order. The petitioner has efficacious alternate remedy of filing appeal under Section 85(3A) of the Finance Act, 1994 within a period of two months from the date of communication of order, even this opportunity was not availed by the petitioner. Instead, the petitioner filed present petition to set-aside the impugned order as well as demand notice belatedly i.e., about ten (10) months from the date of receipt of the impugned order.
PSK,J & LNA,J WP No.28187 of 2023 7
13. The explanation offered by the petitioner that after receipt of impugned order, the same was misplaced inadvertently and therefore, he could not take further steps and thus, delay caused in filing present writ petition, does not inspire confidence of this Bench, considering the conduct of the petitioner even after service of the show-cause notice, personal hearing notices and order in original. There are clear latches, defaults on the part of petitioner. Firstly, in not availing alternate efficacious remedy of filing appeal before the Commissioner (Appeals) and secondly, unexplained delay in approaching this Court.
14. For the above reasons, in considered opinion of this Bench, the writ petition is devoid of any merits and no grounds are made out to interfere with the impugned order. Thus, the writ petition deserves to be and accordingly, dismissed. No order as to costs.
15. As a sequel, miscellaneous petitions pending, if any, shall stand closed.
__________________________________ P.SAM KOSHY, J ___________________________________ LAXMI NARAYANA ALISHETTY, J Date: 17.10.2023 Ktm PSK,J & LNA,J WP No.28187 of 2023 8 HONOURABLE SRI JUSTICE P.SAM KOSHY AND HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WRIT PETITION NO.28187 OF 2023 Date: 17.10.2023 Ktm/kkm