2014 (9) TMI 699 - HC - Service Tax

Refund - natural justice - opportunity of being heard - Held that - On earlier occasions the Deputy Commissioner Service Tax, Division-VI, Mumbai-II and who has passed the impugned order Mr. S.P. Pradhan has been pulled up by this Court. He had not implemented and carried out the orders and directions of this Court which were specific and clear. We do not see how the approach of the officer in this case can be countenanced even in the present matter. When he is aware of the requirement of giving a personal hearing before a adverse order is passed, then, the impugned order shows either a uncalled for or undue enthusiasm which could safely be termed as arrogance as well. We do not approve of such a hasty course and, therefore, proceed to quash and set aside the impugned order. - matter remanded back for fresh decision.

Summary

Issues:
Petition challenging order disposing of refund applications without hearing

Analysis:
The High Court heard the Petitioners' challenge against an order dated 25th July, 2014, which disposed of their applications for refund without granting them a personal hearing. The Court noted that the authorities' approach in deciding the claims without affording the Petitioners an opportunity to be heard had caused serious prejudice. The Court emphasized the importance of natural justice principles in such matters and criticized the authority for dispensing with the requirement of a personal hearing to avoid delays in processing refund claims.

The Court acknowledged the authority's argument that time limits for processing refund claims could justify dispensing with personal hearings, but it found merit in the Petitioners' grievance that such a blanket approach could set a negative precedent for future cases. The Court highlighted that fundamental requirements like granting a personal hearing should not be overlooked or become a general rule, even if there are marginal benefits under the impugned order.

In a significant observation, the Court criticized the Deputy Commissioner for his past failure to implement clear orders from the Court, indicating a pattern of disregard for legal procedures. The Court found the officer's actions in the present case to be hasty and possibly arrogant, leading to the quashing of the impugned order. The Court directed that the Petitioners' refund claim should be reconsidered in accordance with the law, ensuring a fair hearing, opportunity to present relevant evidence, and a reasoned decision unaffected by previous actions. The Court clarified that its decision did not amount to adjudicating the refund claim, leaving all contentions on the merits of the claim open. The Petitions were allowed without costs, emphasizing that the authorities were not obliged to grant the refund solely based on the Court's directions.