Court grants writ petition, sets aside order, remits for fresh consideration. Objections due in 2 weeks, new order in 2 months.

The court allowed the writ petition, set aside the Order-in-Original, and remitted the matter to the 3rd respondent for fresh consideration. The petitioner was directed to file objections to the show cause notice within two weeks, and the 3rd respondent was instructed to pass a new order within two months, considering all objections and after affording a personal hearing. Recovery proceedings pursuant to the recovery notice dated 12-10-2018 were stayed.

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Issues Involved:
1. Legality and jurisdiction of the Order-in-Original.
2. Non-consideration of objections and violation of principles of natural justice.
3. Applicability of extended period of limitation.
4. Imposition of penalties under Section 78 of the Finance Act, 1994.
5. Dismissal of appeal due to delay and maintainability of writ petition under Article 226.

Detailed Analysis:

1. Legality and Jurisdiction of the Order-in-Original:
The petitioner challenged the Order-in-Original No. 9/2018-19/TDINESH/CGSTKKD/ST, dated 16-5-2018, claiming it was illegal, arbitrary, unconstitutional, and passed without jurisdiction. The petitioner argued that the order violated provisions of the Finance Act, 1994, and sought to set it aside. The court noted that the petitioner had initially responded to an audit letter but did not file objections to the subsequent show cause notice, leading to the issuance of the Order-in-Original.

2. Non-consideration of Objections and Violation of Principles of Natural Justice:
The petitioner contended that detailed objections were filed in response to the audit letter, which were not considered by the 3rd respondent before passing the impugned order. This non-consideration was argued to be a violation of the principles of natural justice, resulting in a failure of justice. The court acknowledged that the objections to the audit letter were indeed filed and not disputed by the respondents. The court emphasized that the principles of natural justice were violated as the objections were not considered, warranting judicial review under Article 226.

3. Applicability of Extended Period of Limitation:
The show cause notice was issued invoking an extended period of limitation due to alleged non-declaration of full details of services rendered and considerations received. The petitioner argued there was no suppression of facts with an intention to evade payment of service tax, as all transactions were well documented and ST-3 returns were filed. The court did not explicitly rule on this issue but implied that the matter required reconsideration by the 3rd respondent.

4. Imposition of Penalties under Section 78 of the Finance Act, 1994:
The petitioner argued that penalties under Section 78 were wrongly imposed, as there was no liability to pay service tax. The court noted the petitioner's contention that penalties should not be imposed when there is no liability. This issue was also remitted to the 3rd respondent for reconsideration in light of the objections.

5. Dismissal of Appeal Due to Delay and Maintainability of Writ Petition under Article 226:
The appeal was dismissed by the 2nd respondent due to a 185-day delay. The petitioner argued that the merits of the case were not considered due to the delay, and thus the writ petition under Article 226 was filed. The court referred to the Full Bench decision in Electronics Corporation of India Ltd. v. Union of India, which held that a writ petition could be maintained against an Order-in-Original if the statutory remedy of appeal was time-barred, provided there were sufficient grounds for judicial review. The court concluded that the writ petition was maintainable as the Order-in-Original was passed without considering the objections and in violation of natural justice.

Conclusion:
The court allowed the writ petition, set aside the Order-in-Original, and remitted the matter to the 3rd respondent for fresh consideration. The petitioner was directed to file objections to the show cause notice within two weeks, and the 3rd respondent was instructed to pass a new order within two months, considering all objections and after affording a personal hearing. Recovery proceedings pursuant to the recovery notice dated 12-10-2018 were stayed.

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