Md, M/S.Srinivasa Resorts Ltd., ... vs Joint Commissioner Of Service ...
2022 Latest Caselaw 3072 Tel

            THE HON'BLE SRI JUSTICE UJJAL BHUYAN
                                       AND
          THE HON'BLE MRS JUSTICE SUREPALLI NANDA


              WRIT PETITION No.28069 of 2017

ORDER:    (Per the Hon'ble Sri Justice Ujjal Bhuyan)


     Heard Mr. M.V.J.K.Murthy, learned counsel for the

petitioner, and Mr. A.Rama Krishna Reddy, learned

counsel for the respondents.


2.   By filing this petition under Article 226 of the

Constitution of India, petitioner seeks quashing of order-in-

original dated 28.02.2017 passed by the respondent No.1

under Section 65 of the Finance Act, 1994. The challenge

has been made on the ground of violation of principles of

natural justice.


3.   By the order-in-original dated 28.02.2017 respondent

No.1 confirmed the following demand:-

     i)       Rs.7,86,890.00 including education cess and

secondary & higher education cess for the period from
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                                             W.P.No.28069 of 2017




2011-12 to 2014-15 in terms of Section 73(2) of the

Finance Act, 1994;

     ii)    Rs.4,87,091.00 on account of cenvat credit

allegedly availed of irregularly on renting of immovable

property during the period from April, 2013 to March,

2015.

     iii)   Rs.5,03,938.00 being cenvat credit irregularly

availed of during the period from April, 2013 to March,

2015 etc.


4.   In addition, respondent No.1 imposed penalties of

Rs.1,46,39,366.00 and Rs.24,66,252.00 for alleged various

contraventions under Section 78 of the Finance Act, 1994.


5.   It may be mentioned that prior to passing of the

aforesaid order show cause notice dated 19.12.2016 was

issued by respondent No.1 to which petitioner filed reply.


6.   Learned counsel for the petitioner has drawn our

attention to the notice dated 17.02.2017 issued by office of

respondent No.1 informing the petitioner that personal

hearing in connection with the show cause notice dated
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                                            W.P.No.28069 of 2017




19.12.2016 was fixed on three dates i.e., 23.02.2017,

28.02.2017 and 03.03.2017 at 11.30 AM. Petitioner was

further informed that it should appear before respondent

No.1 for personal hearing on any one of the dates

mentioned above to represent its case in person or through

counsel clarifying that no further extension of time would

be granted. He has highlighted the expression "on any one

of the dates mentioned above" and submits that petitioner

had the option to appear for personal hearing on any one of

the three dates so mentioned.    But before the petitioner

could avail the opportunity of personal hearing on

03.03.2017, the impugned order came to be passed on

28.02.2017.    This, he contends, is violative of the

principles of natural justice.   He has also referred to

Section 33A of the Central Excise Act, 1944 which is made

applicable to the Finance Act, 1994 by virtue of Section 83

thereof and submits that due opportunity of hearing

should be granted to a party though adjournments should

not be granted beyond three times. He has also referred to

a Division Bench decision of Gujarat High court in Regent
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                                                     W.P.No.28069 of 2017




Overseas Pvt. Ltd., v. Union of India1 and submits that

Gujarat High Court has taken the stand that it is not

permissible for the adjudicating authority to issue one

consolidated notice fixing three dates of hearing whether

such three dates are sought for or not by the party. Since

adjudicating authority has given choice of three dates of

personal hearing, the adjudicating authority is required to

adhere to the schedule of dates and could not have

pronounced the order-in-original before exhaustion of all

the three dates.


7.       Mr. A.Rama Krishna Reddy, learned counsel for the

respondents, has referred to the counter affidavit filed on

behalf of the respondents and submits that as per record,

petitioner failed to appear on the second date i.e., on

28.02.2017, whereafter the case was decided ex parte

based on the written reply of the petitioner.              The date,

03.03.2017,         was        erroneously   mentioned   due     to    a

typographical error. That apart he has also referred to a

circular dated 10.03.2017 issued by the Central Board of


1
    (2017) 47 GSTR 233 (Guj)
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                                                W.P.No.28069 of 2017




Indirect Taxes and Customs providing for three personal

hearings and submits that the said circular has only

prospective effect and does not have retrospective effect.

He has also placed before us a number of judgments

including Union of India v. Zalcon Electronics2 on the

basis of which he contends that when there is alternative

remedy available or is provided by the statute, entertaining

a writ petition against a primary order would be a wrong

approach on the part of the High Court. According to him,

petitioner has the remedy of filing further appeal before the

Commissioner under Section 35F of the Central Excise Act,

1944 read with Section 85 of the Finance Act, 1994.


8.        We have considered the rival submissions made at

the bar.


9.        There is no dispute to the proposition that when the

statute provides for a remedy, ordinarily a writ court would

be reluctant to entertain a writ petition.     However, there

are well recognized exceptions to the above rule of self-

imposed limitation. One such well recognized exception is

2
    2010 (255) E.L.T.490 (S.C.)
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                                                          W.P.No.28069 of 2017




violation of the principles of natural justice.                If there is

violation of the principles of natural justice, the writ court

may still entertain a petition under Article 226 of the

Constitution        of     India   notwithstanding       availability      of

alternative remedy.


10.   Having noted the above, we may advert to the

personal     hearing          notice       dated   17.02.2017.         Since

respondents have now stated that mentioning of the third

date is a typographical error, it would be appropriate to

extract the same in its entirety. Notice dated 17.02.2017

reads as under:-

      "To
      M/s.Srinivasa Resorts Ltd.,
      6-3-1187, Grand Kakatiya Hotel,
      Begumpet,
      Hyderabad-5000016.

             Sub:        Service Tax - Non payment of Service Tax by
                         M/s.Srinivasa Resorts Ltd. - Intimation of
                         Personal Hearing - Reg.

            Ref:         Show cause Notice Sl.No.64/2015-ADC (OR
                         No.01/2017 - Adjn-ST(JC) dt. 19.12.2016

                                   ****

Please refer to the Show Cause Notice cited above.

2. In this regard, I am directed by the Joint Commissioner of Service Tax, Service Tax Commissionerate, Hyderabad to inform you that the Personal Hearing in the above case has been fixed at 11.30 AM on the following dates:

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                                                          W.P.No.28069 of 2017




             (i) 23.02.2017
             (ii) 28.02.2017
             (iii) 03.03.2017

3. You are therefore requested to appear before the Joint Commissioner, Service Tax Commissionerate, H.No.11-5- 423/1/A, 1st Floor, Sitaram Prasad Towers, Red Hills, Lakdi Ka Pool, Hyderabad on any one of the dates mentioned above, to represent your case in person and/or through Counsel. No further extension of time will be given under any circumstances.

4. In case if you fail to appear before the Joint Commissioner on the said date and time, it would be construed that you do not wish to be heard in person, the same would be taken into record and your case will be decided ex-parte basing on the merits and the material evidence available on record.

Yours faithfully,

(T.V.RAO) SUPERINTENDENT (ADJN)"

11. From the above it is seen that the personal hearing

was in connection with the show cause notice issued to the

petitioner on 19.12.2016. Three dates of personal hearings

were mentioned and it was stated in paragraph 3 that

petitioner could appear on any one of the dates mentioned

either in person or through counsel. Beyond the three

dates mentioned above, no further extension of time would

be given.

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12. We have carefully gone through the notice dated

17.02.2017. To our mind stand taken by the respondents

that mentioning of the third date of hearing i.e.,

03.03.2017 is a typographical error does not appeal to us.

It is clear as day light that the intention of the respondent

No.1 was to provide personal hearing on either of the three

dates. If the respondents had provided three dates with

the option to the petitioner to avail any one of the dates for

personal hearing, then respondents ought to have waited

for the last date so mentioned in the notice dated

17.02.2017 which is 03.03.2017. Abrupt passing of the

order-in-original on 28.02.2017 without waiting for the

petitioner to avail personal hearing on 03.03.2017 and

proceeding ex parte on 28.02.2017 has vitiated the

impugned order-in-original.

13. Considering the above, we set aside the order dated

28.02.2017. It is open to the respondents to pass fresh

order(s) in accordance with law. Needless to say, before

passing fresh order due notice as well as opportunity of

hearing shall be granted to the petitioner.

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14. Writ petition is accordingly allowed.

15. Miscellaneous applications pending, if any, shall

stand closed. However, there shall be no order as to costs.

______________________________________ UJJAL BHUYAN, J

______________________________________ SUREPALLI NANDA, J

27.06.2022 vs