Order quashed for violation of natural justice; matter remanded for fresh consideration and personal hearing within three months

Madras HC found a violation of natural justice where the impugned order had not been proved served on the petitioner. Noting the Supreme Court dismissed the tax authorities' SLP and the earlier HC judgment remains binding, the court quashed the impugned order and remanded the matter to the 1st respondent for fresh consideration. The 1st respondent must afford the petitioner a reasonable opportunity, including a personal hearing, and pass a fresh order within three months of receipt of this decision. Petition disposed.

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Issues involved: Challenge to Order-in-Original dated 30.01.2021 for assessment years 2011-2012 to 2015-2016 u/s 73(4B) of the Finance Act, 1994.

Details of the Judgment:

Issue 1: Compliance with time limit under Section 73(4B) of the Finance Act, 1994
The petitioner, engaged in manufacturing, challenged the impugned order on the grounds of non-service and delay. The petitioner contended that the order was issued beyond the prescribed time limit as per Section 73(4B) of the Finance Act, 1994. The petitioner argued that the mandatory timeline for determining service tax liability was not adhered to, as the order was issued on 30.01.2021 after a show cause notice in April 2017. The petitioner emphasized the importance of timely communication of such orders for the interest of justice.

Issue 2: Opportunity to contest tax demand
The respondents, represented by Mr. Ramesh Kutty, highlighted that the impugned assessment issue had been decided in favor of the petitioner by the Telangana and Andhra Pradesh High Court, with the Supreme Court declining to interfere. It was noted that the Special Leave Petition against the High Court's decision was dismissed by the Supreme Court, thereby upholding the High Court's judgment. As there was no proof of service of the impugned order on the petitioner, the High Court deemed it just and appropriate to provide the petitioner with an opportunity to contest the tax demand.

Judgment:
Upon examination, the High Court quashed the impugned order and remanded the matter for reconsideration by the 1st respondent. The 1st respondent was directed to afford the petitioner a reasonable opportunity, including a personal hearing, and to issue a fresh order within three months from the date of receipt of the High Court's order. The writ petition was disposed of without costs.

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