Writ not maintenanble as Assessee did not responded to show-cause notice issued

By | March 7, 2016

 

Held

In the present case,petitioner had simply not responded to the show-cause notice issued by the adjudicating authority. We have noticed that after receipt of show-cause notice, for months together, petitioner filed no reply. The order of adjudication came to be passed more than a year later. At no point of time, the petitioner either filed a reply or even participated in the adjudication proceedings. The adjudicating authority has recorded that, several notices for personal hearing were issued under registered A.D., despite which, neither the petitioner nor its authorized representative ever appeared before him.

Surely, the law does not come to the aid of indolent, tardy or lethargic litigant. The conduct of the petitioner would dissuade us from entertaining these petitions.

HIGH COURT OF GUJARAT

Nice Construction

v.

Union of India

AKIL KURESHI AND MOHINDER PAL, JJ.

SPECIAL CIVIL APPLICATION NOS. 6407 AND 6409 OF 2015

FEBRUARY  3, 2016

Nirav P. Shah, Adv. for the Petitioner. R.J. Oza, Adv. for the Respondent.

ORDER

Akil Kureshi, J. – The petitioner was engaged in construction activities. The petitioner was liable to pay service tax on such services provided. The petitioner, however, did not obtain registration under the service tax nor paid such tax. The respondent authorities, therefore, after carrying out investigation, issued a show-cause notice dated 25.01.2012 calling upon the petitioner as to why unpaid service tax with interest and penalty be not recovered. Admitted position is that, the petitioner filed no reply to such show-cause notice. The adjudicating authority also fixed various dates for personal hearing. Despite which, no one appeared for the petitioner before the adjudicating authority. The authority, therefore, finally passed order dated 27.08.2013 confirming the duty demand with interest and penalties. Against such order, statute provided appeal to the Appellate Commissioner which could be presented within 60 days. The statute also enabled the appellate authority to condone delay to a maximum of 30 days on the appellant showing sufficient cause preventing it from presenting appeal within the period of limitation. In other words, statutorily, the Appellate Commissioner had no power to condone any delay beyond a period of 30 days. Admittedly, the petitioner filed such appeal with a delay of 48 days and thus, such appeal was filed 18 days beyond the maximum period, for which, the Commissioner could ignore the delay. The petitioner’s appeal, therefore, came to be dismissed only on the ground of non-condonable delay, upon which, the petitioner has filed these petitions in similar circumstances.

2. Learned counsel for the petitioner submitted that, even if the Commissioner had no power to condone the delay, the Court could, in exercise of writ jurisdiction under Article 226 of the Constitution, examine the legality and propriety of the order in original passed by the adjudicating authority. Such a view has been consistently taken by this Court in large number of decisions rendered by Division Benches. The issue came to be finally settled upon reference made to three Judge Bench in case of Panoli Intermediate (India) (P.) Ltd. v. Union of India [2015] 51 GST 720 (LB). The larger Bench rendered its opinion as under:—

“31. We may now proceed to answer the question

(1) Question No.1 is answered in negative by observing that the limitation provided under section 35 of the Act cannot be condoned in filing the appeal beyond the period of 30 days as provided by the proviso nor the appeal can be filed beyond the period of 90 days.

(2) The second question is answered in negative to the extent that the petition under Article 226 of the Constitution would not lie for the purpose of condonation of delay in filing the appeal.

(3) On the third question, the answer is in affirmative, but with the clarification that-

(A) The petition under Article 226 of the Constitution can be preferred for challenging the order passed by the original adjudicating authority in following circumstances that

(A.1) The authority has passed the order without jurisdiction and by assuming jurisdiction which there exist none, or

(A.2) Has exercised the power in excess of the jurisdiction and by overstepping or crossing the limits of jurisdiction, or

(A.3) Has acted in flagrant disregard to law or rules or procedure or acted in violation of principles of natural justice where no procedure is specified.

(B) Resultantly, there is failure of justice or it has resulted into gross injustice.

We may also sum up by saying that the power is there even in aforesaid circumstances, but the exercise is discretionary which will be governed solely by the dictates of the judicial conscience enriched by judicial experience and practical wisdom of the judge.”

3. Counsel further contended that, on the raw material consumed by the petitioner in construction work, there was exemption of 67% of the value from payment of service tax. The adjudicating authority had adopted figures available in the balance-sheet of the petitioner-company. If the appropriate exemption notification was applied by the adjudicating authority, the tax demand would have come down to a third of what was confirmed, corresponding penalty also would be reduced.

4. On the other hand, learned counsel Shri Oza for the department opposed the petitions contending that the petitioner had not replied to the show-cause notice nor participated in the hearings fixed from the adjudicating authority from time to time. Even the appeal was filed after delay. Petitions may, therefore, be dismissed.

5. It is undisputedly true that, as held by the Larger Bench in case of Panoli Intermediate (India) (P.) Ltd.(supra), this Court would have jurisdiction to entertain a writ petition under Article 226 of the Constitution in order to examine the validity and legality of an order in-original even when the appeal period and the expendable period had lapsed.

However, while examining such petitions, the Court would always bear in mind the legislative intent of ensuring finality to the orders passed by the Excise and Customs Authorities by providing for a period of limitation for appeal and further providing that, such period could not be extended beyond a period of 30 days. In other words, the statute requires and recognizes that such appeals are filed promptly, within a period of limitation of 60 days prescribed, and, at any rate, not beyond 30 days thereafter.

6. Despite such statutory impediments, the power of the High Court under Article 226 of the Constitution has not been and cannot be taken away. In this context, the Division Benches have recognized certain self imposed restrictions. In case of Amitara Industries Ltd. v. Union of India 2014 (305) ELT 322 (Guj.), it was observed as under:—

“11. In the instant case, as the petitioner has approached this Court urging to invoke extraordinary jurisdiction relying on the decision of D.R. Industries Ltd. v. Union of India (supra), recognising that this Court has extraordinary powers in appropriate case to interfere even while upholding the contention that there is statutory limitation to which delay can be condoned by the authorities. We ourselves have earlier in case of Senior Superintendent of Post Office v. Union of India (supra) recognised that if an aggrieved person knocks the door of High Court seeking redressal under writ jurisdiction for valid reasons, to obviate extraordinary hardship and injustice such challenge can be entertained even beyond the period of limitation.”

7. Even the larger Bench in case of Panoli Intermediate (India) (P.) Ltd. (supra) laid down certain guidelines for exercising such powers.

8. In the present case, quite apart from the petitioner presenting the appeal beyond the period what the Commissioner could condone, had simply not responded to the show-cause notice issued by the adjudicating authority. We have noticed that after receipt of show-cause notice, for months together, petitioner filed no reply. The order of adjudication came to be passed more than a year later. At no point of time, the petitioner either filed a reply or even participated in the adjudication proceedings. The adjudicating authority has recorded that, several notices for personal hearing were issued under registered A.D., despite which, neither the petitioner nor its authorized representative ever appeared before him.

9. Surely, the law does not come to the aid of indolent, tardy or lethargic litigant. The conduct of the petitioner would dissuade us from entertaining these petitions.

10. In the result, petitions are dismissed.

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