2024 (2) TMI 505 - HC - Service Tax

Violation of principles of natural justice - recovery of nonpayment/ short payment of service tax - petitioner did not file any reply neither he produced any documents as directed by SCN - opportunity of hearing was given to petitioner or not - HELD THAT - The petitioner has been granted four opportunities of personal hearing. In respect of the three opportunities earlier granted there is not even request for adjournment. It is only on the fourth opportunity i.e. 09.10. 2020 fixing the date for hearing on 16.10.2020, a letter was addressed. Admittedly, the petitioner did not file any reply to the said Show Cause Notice. The whole effort of the petitioner was to postpone the finalisation of the order. The authority cannot indefinitely wait for the petitioner s appearance for personal hearing before the authority concerned. The petitioner himself has not availed the three earlier opportunities of hearing and with respect to the fourth opportunity, the petitioner has filed adjournment, this Court is of the considered view that there has been no violation of the principles of natural justice as alleged by. Moreover, there is a remedy of appeal and this ground also can be taken before the appellate authority. There is no bar under the statue that the ground of violation of principles of natural justice cannot be taken before the appellate authority and, it can be taken only before this Court. The impugned order is well reasoned order. There are no merit in the writ petition - petition dismissed.

Summary

Issues:
The judgment involves the assessment of service tax liability under the Finance Act, 1994 for the period from 2012-13 to 2016-17, specifically related to 'Advertising Agency Service' and 'Legal Consultancy Services' under the reverse charge mechanism.

Assessment of Service Tax Liability - Advertising Agency Service:
The petitioner, engaged in providing services related to advertising, was assessed for non-payment/short payment of service tax due to the exclusion of certain amounts under 'BIZ-show charges'. Despite receiving a Show Cause Notice and multiple opportunities for personal hearing, the petitioner failed to respond or produce necessary documents. The order in original was passed imposing a demand of Rs. 64,52,336/- and Rs. 1,335/- along with penalty and interest. The Court noted that the petitioner had been granted four opportunities for personal hearing, with no response or request for adjournment until the fourth opportunity. The Court held that there was no violation of natural justice principles as alleged, emphasizing that the authority cannot indefinitely wait for the petitioner's appearance. The judgment stated that the petitioner's failure to avail earlier opportunities and only seeking adjournment on the fourth occasion did not warrant interference with the order.

Legal Consultancy Services - Reverse Charge Mechanism:
Additionally, the petitioner was assessed for Legal Consultancy Services as a recipient of service under the reverse charge mechanism for the period from 2014-15 to 2016-17. The order passed by the 1st respondent imposed a service tax liability along with penalty and interest. The Court found that the petitioner had been given opportunities for personal hearing but failed to respond adequately. It was emphasized that the petitioner's repeated attempts to delay the finalization of the order did not constitute a violation of natural justice principles. The judgment concluded that the impugned order was well-reasoned, and there was no merit in the writ petition, leading to its dismissal.