2014 (12) TMI 866 - HC - Service Tax

Court Nullifies Jurisdiction Issue, Orders Costs to Petitioner

Vandana Travels & Tours Versus Commissioner (Appeals), Central Excise & Service Tax & 3 Others

Vandana Travels & Tours Versus Commissioner (Appeals), Central Excise & Service Tax & 3 Others - 2015 (37) S.T.R. 417 (All.) Issues Involved:1. Jurisdiction of the assessing authority.2. Legality of parallel assessment proceedings.3. Validity of the ex-parte order dated 22.5.2008.4. Rejection of recall application by respondent no. 3.5. Dismissal of appeal by respondent no. 1 on the ground of delay.6. Violation of Article 14 of the Constitution of India.7. Entitlement to costs for harassment and deprivation of lawful money.Issue-wise Detailed Analysis:1. Jurisdiction of the Assessing Authority:The petitioner, a service provider as Rent-a-cab-operator, was registered under the Finance (No. 2) Act of 1994 with the Deputy Commissioner, Central Excise and Service Tax Division-I, Allahabad (respondent no. 2). It is undisputed that respondent no. 2 is the jurisdictional assessing authority for the petitioner. The petitioner was assessed by respondent no. 2 for the relevant periods, and demands were created accordingly.2. Legality of Parallel Assessment Proceedings:A parallel assessment proceeding was initiated by respondent no. 3, Assistant Commissioner, Central Excise and Service Tax Division-II, Allahabad, for the same transactions and periods already assessed by respondent no. 2. This parallel proceeding was without jurisdiction, as admitted by the respondents. The respondent no. 3 lacked the authority to initiate such proceedings, making the order dated 22.5.2008 a nullity.3. Validity of the Ex-parte Order Dated 22.5.2008:The ex-parte order dated 22.5.2008 passed by respondent no. 3 was for the same transactions and periods already assessed by respondent no. 2. The petitioner claimed no knowledge of this order until a recovery letter was sent on 11.6.2013. The appellate authority observed the parallel assessment and noted that the order from respondent no. 2 had not attained finality. The order by respondent no. 3 was without jurisdiction and thus void ab initio.4. Rejection of Recall Application by Respondent No. 3:The petitioner moved a recall application against the ex-parte order, which was rejected by respondent no. 3 on the grounds that the order had attained finality as it was not challenged in appeal. This rejection was improper as the order was without jurisdiction. The proper course was to recall the order when it was evident that respondent no. 2 was the jurisdictional authority.5. Dismissal of Appeal by Respondent No. 1 on the Ground of Delay:The petitioner's appeal against the ex-parte order was dismissed by respondent no. 1 on the ground of delay. Despite acknowledging the parallel assessment, the appellate authority failed to address the jurisdictional issue adequately. The dismissal on the ground of delay was thus not sustainable.6. Violation of Article 14 of the Constitution of India:The actions of the Central Excise and Service Tax Authorities were deemed arbitrary, illegal, and violative of Article 14 of the Constitution of India. The petitioner was subjected to unauthorized demands and deprived of lawful money due to the improper actions of respondent no. 3.7. Entitlement to Costs for Harassment and Deprivation of Lawful Money:The petitioner sought costs for the harassment and deprivation of lawful money caused by the unauthorized actions of respondent no. 3. The court acknowledged the petitioner's claim and awarded costs of Rs. 25,000/- to be paid by respondent no. 3 within one month.Conclusion:The court set aside the impugned orders dated 30.1.2014, 22.5.2008, 11.6.2013, and 10.10.2013, recognizing the lack of jurisdiction and the nullity of the parallel assessment proceedings initiated by respondent no. 3. The writ petition was allowed with costs awarded to the petitioner.