2019 (7) TMI 832 - HC - Service Tax

Validity of rectification application - Recovery of service tax - proviso to Section 73(1) of the Finance Act, 1994 - grounds urged by the petitioners in these writ petitions would not absolve the clear admission of tax liability by the petitioners to the show cause notice issued by the Adjudicating Authority - period December 2012 to March 2016 - in the rectification application it is pleaded that opportunity was prayed but the same was denied but the same is not supported by any material evidence - HELD THAT - In the rectification application a reference is also made to the circular dated 10.03.2017 issued by the Central Board of Excise and Customs to emphasize that fair opportunity of hearing has to be granted to the assessee. It is also the grievance of the petitioner that the said point has not been addressed by the Adjudicating Authority while dismissing the rectification application. It is well settled that admission of the tax liability by the petitioners would not entail the authorities to provide any opportunity in terms of the Government Order dated 10.03.2017 referred to by the learned counsel for the petitioners. Even if there is any typographical error in the adjudicating order at Annexure-A, the same has been clarified in the order of the rectification dated 19.04.2018 that it was inadvertently mentioned as 24.01.2018 as the date of passing of the order instead of 30.01.2018 . Petitioners cannot take advantage of such typographical error when it is not disputed that the personal hearing was given to the petitioners on 30.01.2018 and the order was passed on the same day. No good grounds made out by the petitioners to interfere with the orders impugned herein. Petition dismissed.

Summary

Issues:
Challenge to show cause notice and order in original, jurisdiction of adjudicating authority, fair opportunity for submissions, admission of tax liability, rectification application dismissal, typographical error in adjudicating order, alternative remedy of appeal.

Analysis:

1. Challenge to Show Cause Notice and Order in Original: The petitioners challenged the show cause notice dated 21.04.2017 and the order in original dated 24.01.2018 passed by the respondent seeking other consequential reliefs. The notice related to the period from December 2012 to March 2016, questioning the service tax liability under Section 73(1) of the Finance Act, 1994.

2. Jurisdiction of Adjudicating Authority: The petitioners argued that the adjudicating authority had no jurisdiction to invoke Section 73 of the Act for transactions involving a turnover of more than ?50 lakhs. They contended that no mandatory consultation period was provided, and the authority did not follow due process. However, the revenue argued that the admission of tax liability by the petitioners was sufficient to proceed with the final orders.

3. Fair Opportunity for Submissions: The petitioners claimed that they were not provided a fair opportunity to present their submissions, especially as the show cause notice was issued beyond the prescribed limitation period. They argued that even with the admission of tax liability, there is no estoppel against the law. The court noted that all grounds raised by the petitioners seemed to be an afterthought and that objections regarding jurisdiction should have been raised earlier.

4. Admission of Tax Liability: The court emphasized that the petitioners had admitted their tax liability in response to the show cause notice. The petitioners' subsequent rectification application was dismissed, with the court finding no fault in the authority's decision. The court highlighted that admission of tax liability does not necessarily entitle the petitioners to further opportunities as per the Government Order dated 10.03.2017.

5. Rectification Application Dismissal: The court noted that the rectification application referred to a circular emphasizing the need for a fair hearing, which the Adjudicating Authority allegedly did not address. However, the court found that the petitioners failed to provide material evidence to support their claim that an opportunity for a hearing was denied.

6. Typographical Error in Adjudicating Order: The court addressed a typographical error in the adjudicating order, clarifying the correct date of passing the order. The petitioners' attempt to capitalize on this error was dismissed since it did not affect the fact that a personal hearing was provided on the correct date.

7. Alternative Remedy of Appeal: The court ultimately dismissed the writ petitions but granted the petitioners the liberty to appeal within four weeks. The appellate authority was directed to consider the appeal without objecting to the limitation aspect and to decide the case on its merits in accordance with the law.

This comprehensive analysis covers the various issues raised in the legal judgment, outlining the arguments presented by both parties and the court's reasoning in each instance.