2016 (11) TMI 112 - HC - Service Tax

Liability of service tax - Renting of Immovable Property - Held that - the petitioner did not avail the opportunity provided to him to appear before the authority. Therefore, the procedure adopted by the respondents in proceeding with the adjudication proceeding exparte, was perfectly valid and justified. However, considering the peculiar facts and circumstances of the case, wherein the petitioner had filed a Petition for Eviction before the District Munsif Court cum Rent Controller of Coimbatore in R.C.O.P.No.144 of 2012 and the lessee had entered appearance in the Petition filed by the petitioner under section 11(4) of the Rent Control Act, is also pending and the in the said Petition, an order has been passed to direct the lessee to pay the entire arrears of loan on or before 01.10.2013, which the lessee did not complied with, the petitioner had filed an Execution Petition in E.P.No.5 of 2014, to execute the said order and the said petition is also pending. Further, the petitioner has filed a Civil Suit in O.S.No.2928 of 2015, on the file of the City Civil Court, Bangalore, for recovery of arrears of rent amounting to ₹ 89,85,529/- and the same is also pending. The petitioner has been pushed to and taking note of the fact that the petitioner has complied with the interim direction issued by this Court dated 24.06.2016, this Court is of the view that the petitioner can be afforded one more opportunity and the matter can be adjudicated on merits - petition allowed - matter remanded to the respondents for fresh consideration - opportunity of personal hearing to be provided to the petitioner.

Summary

Issues:
Challenge to Order-In-Original under Finance Act, 1994 for non-payment of Service Tax related to Renting of Immovable Property.

Analysis:
The petitioner challenged an Order-In-Original dated 10.03.2014 under the Finance Act, 1994, concerning non-payment of Service Tax for Renting of Immovable Property. Initially, the petitioner expressed willingness to clear the entire Service Tax liability and produced a demand draft before the Court. An interim order was passed on 24.06.2016, allowing the petitioner to re-validate the expired demand draft and submit it to the respondent Department. The petitioner complied with this order by paying the Service Tax amount and interest claimed. The Senior Panel Counsel for the respondents confirmed the payment compliance.

Analysis Continued:
While the respondents proceeded with the adjudication ex parte due to the petitioner not availing the opportunity to appear before the authority, the Court considered the unique circumstances. The petitioner had filed various legal actions, including a Petition for Eviction and a Civil Suit for recovery of arrears of rent, which were pending. Acknowledging the petitioner's compliance with the interim order and the challenging circumstances faced, the Court decided to afford the petitioner another opportunity for a fresh consideration of the matter on its merits.

Conclusion:
In light of the above analysis, the High Court allowed the Writ Petition, setting aside the impugned order and remanding the matter to the respondents for a fresh consideration. The respondents were directed to provide a personal hearing to the petitioner, address all raised issues, and proceed with the adjudication of the show cause notice in accordance with the law. No costs were awarded, and the connected Miscellaneous Petition was closed.