2018 (12) TMI 1997 - HC - GST

Violation of the principles of natural justice - lack of jurisdiction - lack of authority on the part of the officer passing the orders - applicability of N/N. 32/2010-ST, dated 22.06.2010 - HELD THAT - There is no dispute about the fact that the petitioner is a service provider. If he is a service provider and if he is providing taxable service, the petitioner, according to the learned counsel, is entitled to the benefit of the notification. If he is in fact entitled to the benefit of the notification, then the levy under the impugned order would be without the authority of law. But this question has not been gone into in the impugned order, partly because of the default on the part of the petitioner himself, in having failed to reply to the show cause notice and in having failed to appear for personal hearing. One opportunity could be given to the petitioner with a direction to the 3rd respondent to examine the question of applicability of the aforesaid notification. Hence, the writ petition is allowed, the impugned order is set aside and the matter is remanded back to the 3rd respondent. The petitioner shall file a reply both to the show cause notice as well as to the reasons contained in the impugned order, on or before 31.12.2018. Thereafter, the 3rd respondent shall fix a date for personal hearing and pass orders afresh. Petition allowed by way of remand.

Summary

Issues:
Challenge against Order-in-Original under Finance Act, 1994 - Failure to avail alternative remedies - Violation of principles of natural justice - Lack of jurisdiction - Lack of authority - Applicability of notification No. 32/2010-ST.

Analysis:
The judgment involves a challenge against an Order-in-Original passed by the 3rd respondent under the Finance Act, 1994, invoking Sections 73(2), 75, 77(1), and 77(2) along with relevant Rules. The petitioner, a service provider, filed a writ petition against the impugned order dated 07.03.2017 after being unable to pursue an appeal due to a delay issue, utilizing a Full Bench decision precedent. The Court acknowledged the importance of exhausting alternative remedies before resorting to writ petitions, emphasizing criteria like violation of natural justice, lack of jurisdiction, or authority to determine writ jurisdiction.

The central legal question raised pertains to the authority of law regarding the levy, focusing on the applicability of notification No. 32/2010-ST dated 22.06.2010. The notification exempts taxable services provided for the distribution of electricity from service tax under Section 66 of the Finance Act, 1994. The petitioner's entitlement to this exemption was not addressed in the impugned order due to the petitioner's failure to respond to the show cause notice and attend the personal hearing.

The Court directed the 3rd respondent to re-examine the applicability of the notification and granted the petitioner an opportunity to file replies by a specified date, followed by a fresh personal hearing and orders. The impugned order was set aside, and the matter was remanded back to the 3rd respondent for reconsideration. The judgment concluded with the closure of pending miscellaneous petitions and a decision of no costs to be imposed.