Court quashes Order-in-Original, cites violations of natural justice principles. Petitioner granted hearing opportunity.

The court quashed the Order-in-Original and remanded the matter back to the adjudicating authority due to violations of natural justice principles and delays in passing the order. The petitioner was granted an opportunity for a hearing and to submit reconciliation documents. The respondents were directed to allow the petitioner to furnish a reconciliation statement for specific periods, with the entire process to be completed within 16 weeks.

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Issues Involved:
1. Violation of principles of natural justice.
2. Delay in passing the adjudication order.
3. Consideration of reconciliation documents submitted by the petitioner.
4. Maintainability of the writ petition.

Issue-wise Detailed Analysis:

1. Violation of principles of natural justice:
The petitioner challenged the Order-in-Original dated 25.07.2022, arguing that it was passed in flagrant violation of the principles of natural justice. The petitioner contended that the adjudicating authority did not consider the detailed reconciliation and documentary evidence submitted on 12.01.2021. Despite the submission, the adjudicating authority recorded that no other evidence was produced after the reminder dated 03.12.2020. This omission was significant as the petitioner's submissions were crucial for explaining the differences between the figures in Form 26AS and ST-3 Returns.

2. Delay in passing the adjudication order:
The petitioner argued that the adjudication order was passed after a delay of more than 18 months from the date of the final hearing, violating Clause 14.10 of Master Circular No. 1053/02/2017-CX, which mandates that decisions should be communicated as expeditiously as possible, but not later than one month, barring exceptional circumstances to be recorded in the file. The court noted that the delay in passing the order led to serious prejudice against the petitioner, as the adjudicating authority failed to consider the essential documents submitted by the petitioner.

3. Consideration of reconciliation documents submitted by the petitioner:
The petitioner submitted a detailed reconciliation statement on 12.01.2021, explaining the differences between the figures in Form 26AS and ST-3 Returns. However, the adjudicating authority did not consider these documents while passing the Order-in-Original. The court emphasized that the adjudicating authority admitted that liability could not be determined solely based on Form 26AS and that reconciliation was necessary. Despite this, the differential amounts for the financial years 2012-13 to 2015-16 were treated as suppression of turnover without considering the reconciliation documents.

4. Maintainability of the writ petition:
The respondents raised a preliminary objection regarding the maintainability of the writ petition, arguing that the petitioner had an equally efficacious and alternative remedy of preferring an appeal before the Central Excise and Services Tax Appellate Tribunal (CESTAT). The court, however, held that the writ application was maintainable due to the violation of principles of natural justice and the delay in passing the adjudication order, which was contrary to the guidelines issued by the CBEC.

Conclusion:
The court quashed and set aside the Order-in-Original dated 25.07.2022 and remanded the matter back to the adjudicating authority to pass a fresh adjudication order after giving the petitioner an opportunity for a hearing and considering the documents submitted on 12.01.2021. The court also directed the respondents to grant the petitioner an opportunity to furnish a reconciliation statement for the periods 2016-17 and 2017-18. The entire exercise of passing the de novo adjudication order was to be completed within 16 weeks from the date of receipt of the court's order.

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