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IN THE HIGH COURT OF DELHI
Manmohan, Navin Chawla, JJ.
Pyramid Buildtech Pvt. Ltd. - Appellant
Versus
Union of India - Respondent
W.P.(C) 6895 of 2021 & C.M. No. 21794 of 2021
Decided On : 23-07-2021
The court underscores the necessity of adhering to procedural fairness and principles of natural justice when imposing significant tax liabilities.
Headnote:(A) Central Excise Act, 1944 - Sections 33A(1) and 37C - Service tax demand - Challenge to order confirming service tax and penalties of Rs.21,51,01,611 for non-compliance and failure to follow adjudication procedure - Petitioner's request for fair hearing based on non-appearance due to lack of notice. (Paras 3, 4, 5)
(B) Principles of Natural Justice - Importance of providing a fair hearing and opportunities for representation in administrative proceedings. (Para 3)
Facts of the case:
The petitioner challenges an order confirming service tax and penalties, claiming it was passed without following due process and that no service tax is applicable on land procurement agreements that were not performed.
Findings of Court:
The court grants the petitioner a final opportunity to appear before the respondent, emphasizing the need for fairness given the high stakes of the demand and lack of prior notice.
Issues: The main issues include whether the order followed the proper adjudication procedure and the relevance of due process to the assessment of service tax liabilities.
Ratio Decidendi: The court emphasized the necessity of following principles of natural justice and proper procedure in tax assessments, especially when significant penalties are involved.
Result: Writ petition disposed of; final opportunity granted.
| Table of Content |
|---|
| 1. challenge of service tax order (Para 2) |
| 2. violation of procedural requirements (Para 3) |
| 3. court granting opportunity for fair hearing (Para 4 , 5) |
| 4. final ruling and directions (Para 6 , 7) |
JUDGMENT
Manmohan, J. (Oral)--The petition has been heard by way of video conferencing.
2. Present writ petition has been filed challenging the order dated 09th March 2021 passed by Commissioner Central Goods and Service Tax, Delhi East confirming the demand of service tax and penalties amounting to Rs.21,51,01,611. Petitioner also seeks a direction to the Respondent no.2 to decide the matter on merits by giving a fair hearing to the petitioners and abide by the Principles of Natural Justice.
3. Learned counsel for the petitioner submits that the impugned order has been passed without following the adjudication procedure under Section 33A(1) and Section 37C of the Central Excise Act, 1944 as well as in violation of principles of natural justice. He also submits that service tax is not liable on procurement of the land from land owners and no service tax can be demanded merely upon an agreement which was not performed.
4. A perusal of the paper book reveals that it is the case of the Revenue Department that though summons had been served upon the petitioner on 17th September, 2018, yet it had neither appeared before the respondent-Department nor any documents had been filed on its behalf. It was only after the respondent-Department contacted the petitioner's auditor, that he appeared and made a statement. Later also efforts were made to serve the petitioner with notices, however, the petitioner was not available at the given address.
5. However, keeping in view the fact that the demand is a high-pitched one and subsequent notices issued by the respondent to the petitioner had not been served upon the petitioner or its authorised representative before the hearing, this Court in the interest of justice, grants last and final opportunity to the petitioner to appear before the respondent no.2 on 2nd and 9th August, 2021 at 11.00 A.M., subject to payment of costs of Rs.2,50,000/- to Delhi High Court Bar Association Pandemic Relief Fund (A/c No.15530110152195; IFSC Code-UCBA0001553) within a week.
6. With the aforesaid directions, the present writ petition along with pending application stands disposed of.
7. The order be uploaded on the website forthwith. Copy of the order be also forwarded to the learned counsel through e-mail
