2018 (10) TMI 706 - HC - Service Tax

Principles of Natural Justice - though personal hearing was sought for, no such opportunity of personal hearing was given to the petitioner - demand of service tax including various cess with Interest and penalty - Held that - The fact remains that before passing the impugned order, the Adjudicating Authority has not given an opportunity of personal hearing. At this juncture, it is useful to refer Section 33A of the Central Excise Act, 1944, which is made applicable to the service tax matters under Section 83 of the Finance Act, 1994 wherein it is contemplated that the Adjudicating Authority shall give an opportunity of being heard for the party in proceedings, if the party so desires. The impugned order, though passed by considering the merits of the matter, cannot be sustained, only on the reason that the same was passed without following the principles of natural justice in its full sense - matter has to be remitted back to the second respondent for passing fresh orders after giving an opportunity of personal hearing to the petitioner - petition allowed by way of remand.

Summary

Issues:
Violation of principles of natural justice in passing the order without granting personal hearing.

Analysis:
The petitioner challenged an order confirming a service tax demand, interest, and penalty. The High Court refrained from delving into the merits of the case but focused on the violation of natural justice principles. The petitioner had requested a personal hearing, which was acknowledged but not granted. The Court noted that the Adjudicating Authority failed to provide the opportunity for personal hearing despite the petitioner's explicit request. Referring to relevant legal provisions, the Court emphasized the importance of granting such hearings in proceedings. Consequently, the Court set aside the impugned order and remitted the matter back to the Adjudicating Authority for fresh consideration, emphasizing the need for a personal hearing. The Court clarified that it was not expressing any opinion on the merits, leaving it to the Adjudicating Authority to decide.

This judgment highlights the significance of adhering to natural justice principles, particularly the right to a personal hearing in administrative proceedings. The Court's decision underscores the procedural fairness required in such matters, emphasizing the duty of the Adjudicating Authority to provide a fair opportunity for parties to present their case. By setting aside the order and directing a fresh consideration with a personal hearing, the Court ensures that the petitioner's rights are upheld and due process is followed. The judgment serves as a reminder of the fundamental principles of justice that must be observed in administrative decision-making processes, safeguarding the integrity and fairness of such proceedings.