Validity of Service Tax Order Under Finance Act, 1994: Delay Impact on Procedural Fairness The court examined the validity of an order under Section 73 of the Finance Act, 1994, concerning service tax. The delay of over 20 months between the ...
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Validity of Service Tax Order Under Finance Act, 1994: Delay Impact on Procedural Fairness
The court examined the validity of an order under Section 73 of the Finance Act, 1994, concerning service tax. The delay of over 20 months between the personal hearing and the issuance of the impugned order was a key issue. The court highlighted the procedural fairness concerns arising from this delay. The matter was scheduled for further proceedings, with the respondent seeking time to obtain instructions.
Issues: 1. Validity of the order made under Section 73 of Finance Act, 1994 regarding service tax 2. Delay between personal hearing and issuance of impugned order
Analysis: 1. The judgment concerns an order made under Section 73 of the Finance Act, 1994, related to service tax, which has been challenged. The order, referred to as the 'impugned order,' was dated 26.07.2018 and bears a specific Reference No. The writ petitioner argues that the impugned order was served on them on 29.08.2018. It is highlighted that while the opportunity to show cause is statutorily imperative, the respondent chose to provide a personal hearing to the writ petitioner on 15.11.2016, before the Goods and Service Tax (GST) regime came into effect on 01.07.2017. The personal hearing was conducted by the Commissioner of Service Tax-II. Post the implementation of GST, the matter was reassigned to the Commissioner of GST and Central Excise, Chennai - Outer. The same individual who conducted the personal hearing pre-GST regime became the Commissioner post-GST and passed the impugned order based on the reassignment of work.
2. The judgment also addresses the significant delay between the personal hearing held on 15.11.2016, and the issuance of the impugned order on 26.07.2018, which amounts to more than 11/2 years or 20 months. The learned Standing Counsel for Customs and Indirect Taxes accepts the notice on behalf of the sole respondent and requests time to obtain instructions. The matter is scheduled to be listed on 13.08.2019 for further proceedings. The delay between the personal hearing and the final order raises concerns regarding procedural fairness and adherence to timelines in adjudication proceedings.
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