Court sets aside Order-in-Original for lack of notice service findings, emphasizes need for determinations before ex parte proceedings

The Court set aside the Order-in-Original due to the lack of explicit findings on the service of notices, emphasizing the need for such determinations before conducting exparte proceedings. The case was remanded to the first respondent for a fresh decision, directing the petitioner to respond within 15 days and ensuring a proper hearing opportunity. The writ petition was granted, with pending miscellaneous applications closed, and no costs awarded.

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Issues:
Quashing of Order-in-Original for service tax demand, violation of principles of natural justice, dispute over service of show cause notice, exparte proceedings without proper findings.

Analysis:

1. Quashing of Order-in-Original: The petitioner sought to quash the Order-in-Original dated 30.03.2022, which confirmed a service tax demand of Rs.37,83,522.00 for the period 2014-2018, along with penalties and interest. The challenge was based on the alleged non-service of the show cause notice and the notice for personal hearing, leading to a violation of natural justice principles.

2. Violation of Principles of Natural Justice: The petitioner contended that the show cause notice and personal hearing notice were not served upon them, raising concerns about procedural fairness and adherence to natural justice principles. The lack of proper service of such crucial documents was a key ground for challenging the Order-in-Original.

3. Dispute over Service of Show Cause Notice: A dispute arose regarding the service of the show cause notice, with the petitioner denying receipt of the notice dated 24.12.2020. The respondent's counsel claimed that the notice was served on the petitioner's wife, leading to conflicting assertions about the actual service of the notice.

4. Exparte Proceedings without Proper Findings: The Order-in-Original indicated that the petitioner did not respond to the show cause notice or the letters for virtual personal hearing. However, the Court noted the absence of specific findings by the first respondent regarding the service of notices and the petitioner's non-participation. The Court emphasized that a clear finding on the service of notices is essential before proceeding exparte.

In the judgment, the Court found that there was no explicit finding by the first respondent regarding the service of notices to the petitioner, highlighting the necessity for such findings before conducting exparte proceedings. Consequently, the impugned Order-in-Original was set aside, and the matter was remanded back to the first respondent for a fresh decision. The petitioner was directed to submit a reply within 15 days, and the first respondent was instructed to make a fresh decision after providing a proper opportunity for a hearing. The writ petition was allowed, with miscellaneous applications pending to stand closed, and no costs were awarded in the matter.

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