Calcutta High Court (Appellete Side)
M/S. Central Arya Road Transport & Anr vs Union Of India & Ors on 8 December, 2023
Author: T.S. Sivagnanam
Bench: T.S. Sivagnanam, Hiranmay Bhattacharyya
Form No. J.(2)
Item No.3
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
HEARD ON: 08.12.2023
DELIVERED ON: 08.12.2023
CORAM:
THE HON'BLE CHIEF JUSTICE T.S. SIVAGNANAM
AND
THE HON'BLE MR. JUSTICE HIRANMAY BHATTACHARYYA
F.M.A. 890 of 2023
With
I.A. No. CAN 1 of 2023
M/s. Central Arya Road Transport & Anr.
Vs.
Union of India & Ors.
Appearance:-
Mr. Saurabh Bagaria
Mr. Indranil Banerjee
Mr. Subrata Mukherjee .........for the appellants
Mr. Debasish Chaudhuri
Ms. Sanjukta Gupta
.........for the respondent no.1/U.O.I.
Mr. Tapan Bhanja
Mr. K. K. Maiti
........for the CGST & CX Authority
JUDGMENT
(Judgment of the Court was delivered by T.S. SIVAGNANAM, C.J.)
1. This intra-Court appeal filed by the writ petitioners is directed against the
order dated 26th July, 2023 passed in W.P.A. No.16171 of 2023. In the said
writ petition, the appellants had challenged the order in original dated 31 st
March, 2023 passed by the Principal Commissioner of CGST & CX,
Kolkata, South. By the said order, the adjudicating authority demanded
service tax including cess of Rs.9,88,29,246/- under Section 73(2) of the
Finance Act, 1994 read with Section 174 of the CGST Act, 2017 and an
equal amount of penalty was also imposed on the appellants/noticees
under Section 78 of the Finance Act, 1994 read with Section 174 of the
CGST Act primarily on three grounds. The order in original was challenged
before the learned writ court, firstly; on the ground that there is a
procedural irregularity inasmuch as the pre-show-cause notice was not
issued as per the relevant circular issued by the Board. This point was not
seriously canvassed by the learned advocate appearing for the appellants
on the ground that the appellants had submitted their reply to the show-
cause notice.
2. The second ground of challenge was to the correctness of invoking the
extended period of limitation for initiation of the proceedings as the
proceedings covered the period from April, 2014 to June, 2017 and show-
cause notice was issued on 11 th November, 2019 prior to which there were
two audits, which were conducted by the department during January, 2015
and January, 2017. Therefore, it is submitted that the extended period of
limitation could not have been invoked as there can be no allegation of
wilful misstatement or suppression of facts or fraud or collusion. In
support of such contention reliance has been placed on the decision of this
Court in Commissioner of Service Tax Vs. Naresh Kumar & Company
Pvt. Ltd. reported in 2022 (67) G.S.T.L. 324 (Cal.).
3. Thirdly, it is submitted that the order in original suffers from perversity on
the face of it inasmuch as the documents, which have been placed before
the adjudicating authority were not considered and some of them have
been rejected on the flimsy reasons of being illegible etc.
4. The learned Single Bench by the impugned order had dismissed the writ
petition on the ground that the order in original is an appealable order
under the statute; the writ court cannot scrutinise the facts on the basis of
which the adjudicating authority has come to the conclusion that the case
of the appellants falls within the exceptions under Section 73(1) of the
Finance Act; that the appellants have not approached the writ court
immediately after receiving the show-cause notice alleging procedural
irregularity and the appellants are precluded from challenging the order of
adjudication on the ground that pre-show-cause notice was not issued after
having submitted the jurisdiction by submitting reply to the show-cause
notice. It may be true that in several cases, the Court has held that
extended period of limitation cannot be invoked in the absence of a factual
finding and there should be clear allegations of wilful misstatement or
suppression of fact or fraud or collusion committed by the assessee. In the
instant case, we have carefully gone through the show-cause notice dated
11th November, 2019 as well as the order in original dated 31 st March,
2023. Prima facie, we are of the view that while issuing the show-cause
notice dated 11th November, 2019, the adjudicating authority in paragraph
9 has set out certain reasons as to why the extended period of limitation is
invokable against the appellants. The appellants have contested the show-
cause notice by submitting the reply and the adjudicating authority has
sustained the allegations in the show-cause notice and justified invocation
of the extended period of limitation. Thus, the case on hand appears to be
not a simple case of going through the show-cause notice and examining as
to whether there is any factual finding with regard to wilful misstatement or
suppression or fraud but to consider the said aspect, facts have to be gone
into, much of which has been seriously disputed by the appellants in their
reply to the show-cause notice.
5. Therefore, we are of the view that in the instant case, the issue as to
whether extended period of limitation could be invoked is not purely a
question of law but a mixed question of fact and law and necessarily,
disputed questions of fact have to be gone, which cannot be adjudicated in
a writ petition.
6. With regard to the allegation that the order in original suffers from
perversity inasmuch as it has ignored vital facts rejected the documents
filed by the appellants on flimsy grounds etc., are also matters involving
adjudication into facts. Admittedly, the appellate remedy available to the
appellants is before the Central Excise and Service Tax Appellate Tribunal.
We have no doubt in our mind to observe that such an appellate remedy is
not only an efficacious remedy but an effective remedy as well. The learned
Tribunal has got sufficient jurisdiction to re-appreciate the facts and come
to an independent conclusion.
7. Therefore, we are of the view that in the facts and circumstances of this
case, the appellants should not be permitted to bypass the appellate
remedy available under the Act and for such reason, the appellants have to
necessarily file an appeal before the learned Tribunal challenging the order
in original dated 31st March, 2023.
8. Therefore, we are not inclined to interfere with the order in original for the
reasons set out in the preceding paragraphs. We make it clear that
whatever observations, which have been made in this order are only prima
facie observations, which will not, in any manner, prejudice the rights of
the appellants in canvassing all issues on facts as well as all questions of
law before the learned Tribunal in the appeal, which the appellants have to
file.
9. In the result, the appeal is dismissed by giving liberty to the appellants to
file an appeal before the learned Tribunal against the order in original
dated 31st March, 2023. If such appeal is filed by the appellants within a
period of 90 days from the date of receipt of server copy of this judgement
and order, the learned Tribunal shall entertain the appeal without reference
to limitation.
10. As observed earlier, all questions of law and facts and points of law are left
open.
11. No costs.
12. Urgent photostat certified copy of this order, if applied for, be furnished to
the parties expeditiously upon compliance of all legal formalities.
(T.S. SIVAGNANAM)
CHIEF JUSTICE
I agree.
(HIRANMAY BHATTACHARYYA, J.)
Pallab/KS AR(Ct.)
