2014 (9) TMI 543 - HC - Service Tax

Waiver of pre-deposit of service tax, interest and penalty - Suppression of the value of taxable services - intention to evade payment of appropriate service tax - Held that - appellant had received the show cause notice on 21.4.2010 issued by the jurisdictional commissioner demanding service tax. It is not in dispute that the appellant had not responded to the said notice. Subsequently, the appellant was called upon for personal hearing on 15.11.2011. However, by letter dated 14.11.2011, the appellant sought time to appear for the personal hearing. Hence, the personal hearings were fixed on 07.12.2011, 27.12.2011 and 18.01.2012. Since the appellant did not appear for the personal hearings, the Commissioner, with no other option, had passed the final order confirming the demand. In any case, no specific provision of law is alleged to have been violated by the Department, on the contrary, we find that a show cause notice has been issued and received by the appellant, for which no reply has been filed by the appellant. Thereafter, notices sent for personal hearing have been returned unserved as the door was locked. - Decided against assessee.

Summary

Issues:
1. Pre-deposit order by the Tribunal
2. Violation of principles of natural justice

Analysis:
1. Pre-deposit order by the Tribunal:
The case involved two appeals filed against the orders of the Tribunal. The appellant, a private limited company, was issued a show cause notice for service tax demand by the Commissioner. Despite multiple opportunities for personal hearings, the appellant did not appear, leading to the Commissioner confirming the demand. The Tribunal directed a pre-deposit of Rs. 40,00,000, which the appellant failed to comply with, resulting in the dismissal of the appeal. The High Court upheld the Tribunal's decision, stating that the appellant had received the show cause notice and had knowledge of the proceedings. The Court found no violation of principles of natural justice and confirmed the Tribunal's orders.

2. Violation of principles of natural justice:
The appellant argued that the personal hearing notices were not served, alleging a violation of natural justice. The appellant cited various decisions in support of their contention. However, the High Court rejected this argument, noting that the appellant had received the show cause notice and had even requested time for a personal hearing in a letter. The Court emphasized that the Department had made efforts to serve the notices, but they were returned unserved as the premises were locked. Therefore, the Court concluded that the appellant was aware of the proceedings and could not claim a lack of service as a defense. Consequently, the Court dismissed the appeals and upheld the Tribunal's orders, including the pre-deposit directive.

In conclusion, the High Court affirmed the Tribunal's decision regarding the pre-deposit order and rejected the appellant's claim of a violation of principles of natural justice. The Court emphasized the appellant's awareness of the proceedings and upheld the dismissal of the appeals.