2015 (7) TMI 468 - HC - Service Tax

Court overturns Adjudication Order citing non-service, address mismatch & lack of natural justice

M/s. Ventrapathi Financial Services Versus The Superintendent of Central Excise and four Others

The Court set aside the Adjudication Order due to non-service of notice, address mismatch, statutory violations, and lack of natural justice principles. ... Validity of adjudication order / order in original - service of letters at wrong address - assessee contended that notice preceding passing of final order was not served on the petitioner thereby the petitioner was deprived of an opportunity to put forth their grievance on merits of the matter - Recovery proceedings - - Held that:- it cannot be said that the Department was not aware of the correct address of the petitioner and it is an admitted fact that both the show cause notice and final order were dispatched to the wrong address resulting in violation of the statutory requirement of service notice for the purpose of fastening liability of service tax on the petitioner. The procedure of service of notice and passing orders as enumerated in the Central Excise Act, 1944 has been made part of the service tax by virtue of Section 83 of the Finance Act. In that view of the matter, the impugned order dated 30.05.2014 cannot be sustained, and accordingly, the same is set aside giving liberty to the respondents-authorities to pass appropriate orders after giving an opportunity of hearing to the petitioner - writ petition allowed - Decided in favor of assessee. Issues:1. Non-service of notice preceding the passing of the final order.2. Mismatch in the address mentioned in the show cause notice and final order.3. Violation of statutory provisions in passing the order of best judgment assessment.4. Non-compliance with principles of natural justice.Analysis:1. The petitioner filed a writ petition seeking to set aside the Adjudication Order passed by the 3rd respondent-Joint Commissioner under the provisions of Central Excise Act for the collection of service tax. The petitioner claimed they were not served with a notice before the final order was passed, depriving them of the opportunity to present their case.2. The petitioner, a service provider, argued that the address mentioned in both the show cause notice and final order was different from the one registered with the Department. The respondents contended that the petitioner was aware of the notice and final order issuance, emphasizing the mismatch in addresses and the petitioner's obligation to exhaust appeal remedies under the Finance Act.3. The Court noted the non-compliance with statutory provisions in the service of notices and passing the best judgment assessment order by the 3rd respondent. The judgment highlighted the importance of following the procedures outlined in the Central Excise Act, 1944, incorporated into the service tax regime by Section 83 of the Finance Act.4. Consequently, the impugned order dated 30.05.2014 was set aside, granting the authorities the opportunity to pass appropriate orders after providing a hearing to the petitioner. A specific time-frame of three months was set for the completion of the hearing and passing of orders. The Court clarified that the order did not express any opinion on the case's merits and allowed the petitioner to raise legal objections, including any limitations, which would be considered in accordance with the law.In conclusion, the writ petition was allowed with no order as to costs, and any pending Miscellaneous Petitions were disposed of as infructuous. The judgment emphasized the importance of adhering to statutory provisions and principles of natural justice in administrative proceedings related to tax assessments.