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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Sonia Gokani, Sangeeta K. Vishen, JJ.
Pranatharthiharan Sridharan – Petitioner
Versus
Union Of India – Respondent
R/Special Civil Application No. 17477 of 2019
Decided On : 26-03-2021
Constitution of India, 1950 - Article 226 - Central Excise Act, 1944 - Section 35(F), 35(B) and 37(C) - Officers of Directorate General of Goods and Services Tax Intelligence - Officer searched both the factory premises of DPTL and resumed voluminous documents alleged to be incriminating in nature. Various statements have been recorded of different persons which included the petitioner also. He has filed form No. 26AS with Income Tax Department to substantiate this version of his. According to him, no notice had been received from the respondent nos. 2 to 4 till his date of retirement - Whether there had been a due service of show cause notice to petitioner, proceedings could not have been proceeded ex-parte, more particularly, when personal penalty has been imposed on petitioner without following any principles of natural justice - Petitioner when claimed violation of natural justice and non affording of opportunity of hearing, to that limited extent, this Court can entertain writ petition. It, however, would allow the liberty to respondent to follow law and proceed.
Finding of the court: When order impugned is duly served upon his personal address at Chennai and if that could be done, there was no earthly reason as to why at an earlier point of time, show cause notice and other notices of hearing could not have been served upon him. Again, there is nothing to indicate as to how this affixing at company premise should be construed as sufficient notice to petitioner nor is it found on record from any document that he was made aware of show cause notice which led to order impugned and therefore, merely because in reply to another show cause notice, he has been made aware also cannot furnish ground to assume that he was aware of the show cause notice, order of which is impugned in this matter. Such assumption and presumption are absent in statute and they cannot furnish basis to sustain the order of huge amount of personal penalty. Foundation of principle of natural justice is audi alteram partem, necessity of grant of opportunity of hearing and no party is to be condemned unheard. Here, there appears to be a flagrant violation of the said principle which necessitates indulgence - Without touching merits of matter and leaving it to parties to decide it before appropriate forum, order in original to the extent concerning present petitioner is quashed and set aside.
Result: Order accordingly
ORDER :
SONIA GOKANI, J.
1. This is a petition where the challenge is made to the legality and validity of ex-parte order in original no. VADEXCUS- 001-COM-22-18-19 dated 11.02.2019 passed by respondent no.3 – Principal Commissioner of Central Excise and GST imposing personal penalty on the petitioner without service of show cause notice and without service of notices of personal hearing.
2. Briefly the facts shorn of details are as follows :-
2.1. The petitioner is a technocrat with over 37 years experience in manufacturing industries. He is an electrical engineer having experience in manufacturing of electric products. The petitioner was with one M/s. W.S. Industries Unit for over three decades. M/s. W.S. Industries Group was manufacturing range of products for Transmission and Distribution Applications of Power Sector.
2.2. The petitioner joined Diamond Power Transformers Ltd. (DPTL), Vadodara in August, 2012 as a Director (Operations). He was only an employee with designation as Director (Operations) and has no Board of Directors level position in DPTL. He was heading the operations of the transformer business, more on power transformer business for power transformer of unit-II and overseeing operation of distribution transformer of unit-I. It was 100% subsidiary of the Diamond Power Infrastructure Ltd. (DPIL), Finance and Accounts, Excise, Sale Tax, Service Tax, etc. under the preview of corporate office.
2.3. The DPTL owned two units, first one located at Ranoli, District Vadodara, Gujarat and the second unit located at Village Samiyala, Padra Taluka, District Vadodara. The petitioner was functioning from Samiyala factory of DPTL.
2.4. It is the case of the petitioner that the officers of the Directorate General of Goods and Services Tax Intelligence, Vadodara Regional Unit undertook search operations at the factory premises of DPTL on 23.09.2014. It is urged that the officer searched both the factory premises of DPTL and resumed voluminous documents alleged to be incriminating in nature. Various statements have been recorded of the different persons which included the petitioner also. He later on left DPTL in June 2016 due to ailment of his mother and settled in Chennai. He has filed form No. 26AS with Income Tax Department to substantiate this version of his. According to him, no notice had been received from the respondent nos. 2 to 4 till his date of retirement.
2.5. It is the say of the petitioner that show cause notice issued on 10.10.2017 by the Additional Director General, DGGSTI, Zonal Unit, Surat being No. DGGSTI/SZU/36-13/2017-18 has not been received by the petitioner, the order which is impugned here. Whereas the one which had been issued and replied, on which he has signed, is the Show Cause Notice dated 01.08.2017 being No. DGGSTI/SZU/36-04/2017-18.
2.6. It is his grievance that on 08.04.2019 the Superintendent of Central Excise, Range – V, Division-II of Vadodara-I Commissionerate – respondent no.4 herein forwarded two original order copies, one of which have been passed by the respondent no.3 - Commissioner of Central Excise, Vadodara-I. The petitioner was at USA with his daughter from 20.03.2019 to 10.06.2019. These orders were delivered to the petitioner's servant who handed over the same to the petitioner on his return. He came to know that he was subjected to the penal proceedings by respondent no.3 by passing the order which is ex-parte, without even serving the show cause notice. The impugned order dated 11.02.2019, therefore, is questioned on the ground that the imposition of personal penalty to the tune of Rs. 2,28,65,888/- (Rupees Two Crores Twenty Eight Lakhs Sixty Five Thousand Eight Hundred and Eighty Eight Only) under Rule 15(1) of the Cenvat Credit Rules, 2004 on the petitioner is ab-initio-void.
2.7. He has emphasized that he had left services of the company in June, 2016. The show cause notice was issued by the respondent no.2 in the year 2017, therefore, without verifying as to whether there had b
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