2023 (7) TMI 1022 - HC - Service Tax

Violation of principles of natural justice - ex-parte order - failure to respond to the Show Cause Notices - HELD THAT - It is observed that the respondents do not seriously contest the reasons assigned by the petitioner. This Court is of the considered view that for complete and effective determination of the liability, the petitioner, who pleads bonafides, must have an opportunity but subject to all just exceptions in law. Hence, the petition is allowed in part and the impugned order dated 18.02.2022 (Annexure-Q) is quashed restoring the proceedings to the respondent for reconsideration for extending an opportunity to the petitioner and the petitioner to avail such opportunity shall appear without further notice before the respondent on 19.04.2023.

Summary

Issues involved:
The petitioner challenged the respondent's ex parte order u/s 73(1) of the Finance Act, 1994, due to failure to respond to Show Cause Notices after winding up the business and relocating to the United States. The main issue was the lack of regular access to the business premises leading to non-response to the notices.

Details of the Judgment:

Issue 1 - Failure to Respond to Show Cause Notices:
The petitioner, represented by Sri. M.N. Shankare Gowda, contended that due to relocating to the United States and closing the business in 2017, he did not have regular access to the business premises. The respondent's counsel, Sri. Aravind V. Chavan, did not dispute these circumstances but argued that the petitioner had a statutory obligation to inform the change in address. The Court acknowledged the petitioner's genuine reasons for non-response and held that the petitioner, pleading bonafides, should be given an opportunity to show cause against the demands in the impugned order.

Issue 2 - Court's Decision:
After considering the submissions, the Court noted that the respondent did not contest the reasons put forth by the petitioner. The Court opined that for a fair determination of liability, the petitioner should be granted an opportunity, subject to legal exceptions. Consequently, the petition was partly allowed, and the ex parte order dated 18.02.2022 was quashed. The proceedings were restored to the respondent for reconsideration, with a direction to extend an opportunity to the petitioner. The petitioner was instructed to appear before the respondent on 19.04.2023 without further notice to avail of this opportunity.