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2024 (12) TMI 336 - HC - GSTMaintainability of petition - availability of alternative remedy - confirmation of demand of service tax, interest and levying of penalty upon the Petitioner - HELD THAT - The record shows that the show cause notices dated 17 October 2018 and 14 October 2019 were issued to Dewan Housing Finance Corporation Limited (Corporate Debtor), requiring the Corporate Debtor to show cause why service tax amounts should not be recovered. Pending the adjudication of the show cause notices, the Reserve Bank of India (RBI) filed Company Petition (IB) No. 4258/MB/2019 before the NCLT initiating the corporate insolvency resolution process against Corporate Debtor. This Petition was admitted by the NCLT on 03 December 2019 - The Impugned Order-in-Original was made on 29 April 2022. On this date, the NCLAT s order dated 12 July 2021 was not pointed out to the 2nd Respondent since the personal hearing had concluded on 25 February 2021. The 2nd Respondent has, therefore, relied upon the direction in paragraph 95 (ii) of the NCLT s order dated 07 Jun 2021, which now stands modified. The Impugned Order dated 29 April 2022 is set aside and the matter remanded to the 2nd Respondent for a fresh decision following law and on its own merits - petition allowed by way of remand.
Issues:
Challenge to order-in-original confirming demand of service tax, interest, and penalty; Efficacy of alternate remedy; Remand of matter to 2nd Respondent; Consideration of NCLAT's order and relevant decisions by 2nd Respondent Analysis: The Petitioner challenged the order-in-original dated 29 April 2022, confirming the demand of service tax, interest, and penalty. Despite having an alternate remedy, the court found it ineffectual due to the delay in the process. A personal hearing was granted to the Petitioner on 25 February 2021, and the impugned order was made on 29 April 2022, creating a situation where the alternate remedy would not be efficacious. The NCLAT modified a crucial direction in a previous order, necessitating the matter to be remanded to the 2nd Respondent, making the alternate remedy redundant in this case. The record revealed that show cause notices were issued to the Corporate Debtor regarding service tax recovery. During the moratorium period, a resolution plan was submitted and accepted by the Committee of Creditors. The NCLT approved the resolution plan, but with a condition that statutory obligations/liabilities of the Corporate Debtor would not be waived. The Petitioner appealed this order before the NCLAT, which modified the direction related to extinguishing dues owed to the government entities not part of the resolution plan. The court noted that the 2nd Respondent did not consider relevant decisions of the Supreme Court and the Court itself while making the impugned order. Therefore, the court quashed the order and remanded the matter to the 2nd Respondent for a fresh decision, emphasizing the need to consider the NCLAT's order and the cited decisions. The 2nd Respondent was directed to provide the Petitioner with a hearing and issue a reasoned order within three months. The rule in the Petition was made absolute, with no order for costs, and interim applications were disposed of. In conclusion, the court set aside the impugned order, emphasizing the importance of considering relevant legal decisions and ensuring a fair and timely decision-making process by the 2nd Respondent.
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