2021 (7) TMI 987 - HC - Service Tax

Principles of natural justice - matter was adjudicated ex-parte, in the absence of the petitioner - petitioner did not appear before the respondent - levy of service tax in respect of service rendered to members - HELD THAT - One more opportunity can be extended to the petitioner to present its case before the respondent. It is true that a person who did not avail of the opportunity for hearing cannot later complain about violation of principles of natural justice. However, considering the fact that Ext.p11 request was made citing the COVID-19 pandemic and considering the fact that it the specific case of the petitioner that E-mail dated 03-03-2021 fixing the date of hearing on 25-03-2021 had not come to the notice of any of the office bearers of the petitioner, it is only appropriate such opportunity is extended to the petitioner. It is settled law that when an order is passed in violation of the principles of natural justice the availability of an alternative remedy is not a bar for exercise of the jurisdiction under Article 226 of the Constitution of India - the respondent shall adjudicate Ext.P7 show cause notice afresh within a period of one month from the date of receipt of a certified copy of this judgment. Petition disposed off.

Issues:
1. Refund of service tax remitted under protest.
2. Adjournment requests due to COVID-19 pandemic.
3. Ex-parte adjudication in absence of petitioner.
4. Violation of principles of natural justice.
5. Alternative remedy against the order.

Analysis:
1. The petitioner, a club, remitted service tax under protest and sought a refund after objecting to the demand. The issue arose after a Supreme Court decision regarding the liability of service tax for services rendered to members. The petitioner filed applications seeking a refund, but a show cause notice was issued, leading to a hearing scheduled on 25-03-2021, where the petitioner did not appear, resulting in an ex-parte adjudication.

2. The petitioner's counsel argued that due to the COVID-19 lockdown, the club was non-functional with minimal staff, and the notice of the hearing was communicated only through email, which was missed by the office bearers. The respondent, however, contended that multiple opportunities were given, and the Department had to consider refund applications within a timeframe, limiting adjournments. The mode of notice through email and video conferencing during the pandemic was deemed acceptable.

3. After considering the submissions, the court acknowledged the importance of natural justice and extended one more opportunity to the petitioner to present its case before the respondent. Despite the general principle that failure to avail a hearing opportunity waives the right to complain later, the court emphasized the impact of the COVID-19 pandemic and the oversight regarding the email notice. Quoting legal precedents, the court highlighted the significance of natural justice in legal proceedings.

4. The court, therefore, set aside the previous order and directed the respondent to re-adjudicate the show cause notice within a month, emphasizing that the petitioner must attend the hearing without seeking further adjournments. The petitioner was instructed to provide an email address for receiving notices promptly to avoid any future complaints about non-receipt. The judgment clarified that no opinion was expressed on the case's merits, and the writ petition was disposed of accordingly.

5. The judgment reaffirmed that the availability of an alternative remedy does not bar the exercise of jurisdiction under Article 226 of the Constitution of India when an order is passed in violation of natural justice, ensuring fairness and due process in legal proceedings.

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