MS AMAN RAJ CONSTRUCTION THROUGH ITS PARTNER ANIL KUMAR SINGH V. PRINCIPAL COMMISSIONER CENTRAL GOODS AND SERVICE TAX AND CENTRAL EXCISE

WPC/2544/2022

AI Insights

The case involves M/s. Aman Raj Construction, a partnership firm, which challenged an ex-parte order-in-original passed by the Additional Commissioner, Central Goods & Service Tax, Ranchi. The order demanded service tax for the financial year 2014-15 on work executed under the 'Pradhan Mantri Gram Sadak Yojana (PMGSY)', claiming it was exempt under a specific notification. The petitioner argued that the order was passed without proper service of notice and in violation of natural justice, as the notices were sent to an incorrect address and not to the registered address with the Income Tax Department. The respondents contended that notices were duly served based on the information available with the department and the Income Tax Department. The court found that the principles of natural justice were not followed, as the notices were not properly served on the petitioner, leading to the quashing of the order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 738040 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 27-07-2023
• Assessment Year: misc
• Other Referred Cases: Imagic Creative (P) Ltd. Vrs. Commissioner of Commercial Taxes and Others, CIT V. Chhabil Dass Agarwal
• Laws Referred To: Finance Act, 1994, Jharkhand Value Added Tax Act, 2005, Central Excise Act, 1944
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PARTH S A SWAROOP RANJANA PATI MUKHERJEE
• Assessee Lawyers: BIREN PODDAR; DEEPAK KR MANAV PIYUSH RAKHI DIKSHA SINHA PODDAR SHARMA DWIVEDI
• Keywords: Ex parte order; Jurisdiction; Natural Justice; PMGSY; Service tax; TDS; VAT
• Section: 73(1); 75; 77; 78; 83; 33(a)

Judgement Text

"1 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(T) No. 2544 of 2022 M/s. Aman Raj Construction, a partnership firm, having its office at Sahijana, Near Government Primary School, P.O. Garhwa, P.S. Garhwa, District Garhwa, through its Partner Anil Kumar Singh ..… Petitioner Versus 1. Principal Commissioner, Central Goods & Service Tax and Central Excise, having his Office at Central Revenue Building, 5-A, Mahatma Gandhi Road, P.O. Doranda, P.S. Chutia, District Ranchi- 834001 2. Additional Commissioner, Central Goods & Service Tax and Central Excise, having his Office at Central Revenue Building, 5-A, Mahatma Gandhi Road, P.O. Doranda, P.S. Chutia, District Ranchi- 834001 ..... Respondents --------- CORAM: Hon’ble Mr. Justice Rongon Mukhopadhyay Hon’ble Mr. Justice Deepak Roshan --------- For the Petitioner : Mr. Biren Poddar, Sr. Advocate M/s Deepak Kr. Sinha, Manav Poddar, Piyush Poddar, Rakhi Sharma, Diksha Dwivedi, Advocates For the Respondent s : Mr. Parth S.A. Swaroop Pati & Mrs. Ranjana Mukherjee, Advocates --------- 08/ 27.07.2023 The instant application has been preferred for following reliefs: a) For quashing and setting aside the ex-parte Order-in-Original No. 13/ST/ Addl Commr/2022 dated 01.02.2022 (Annexure-4), served upon the Petitioner on 23.04.2022, passed by the Additional Commissioner, Central Goods & Service Tax, Ranchi (Respondent No.2), as the same has been passed in violation of Principles of natural justice and the same is without jurisdiction in view of the fact that the said Adjudicating Authority (Respondent No.2), without taking into account/consideration the vital facts of the matter that no Show Cause Notice dated 29.09.2020 as well as none of the subsequent notices issued for personal hearing were served upon the petitioner to its address and further, the above impugned order is also without jurisdiction in view of the fact that no service tax is payable by the petitioner on the work executed by it for the period 2014-15, under the “Pradhan Mantri Gram Sadak Yojana (PMGSY)” as the same is exempted under Sl. No. 13 of Notification No. 25/2012-ST dated 20.06.2012 (Annexure-6) and also in view of the fact that the Petitioner is paying Value Added Tax (VAT) over the entire turnover during the period in question and Principle Employer had also made TDS from the payment made to the Petitioner for the work executed, and it is a settled principle of law that VAT and Service Tax are mutually exclusive in nature. b) For a declaration that the Petitioner is not liable to pay any service tax during the period 2014-15 nor liable to take registration under the provisions of Finance Act, 1994 or to file any return under the said Act. In view of the fact that during the period in question, the Petitioner had paid Value Added Tax (VAT) over the entire turnover and the Principle Employer had also made TDS from the payment made to the Petitioner for the work executed, and it is a settled principle of law that VAT and Service Tax are mutually exclusive in nature as has been held by the Hon’ble Supreme Court in the case of Imagic Creative (P) Ltd. Vrs. Commissioner of Commercial Taxes and Others reported in (2008) 2 SCC 614. c) For any other appropriate (Writ(s), Order(s), Direction(s) as may be deemed fit and proper by your Lordships for doing substantial and 2 conscionable justice to the petitioner. 2. The brief facts of the case as disclosed in the instant application is that during the period in question i.e. for the financial year 2014-15, petitioner executed the work under the Pradhan Mantri Gram Sadak Yojana (PMGSY) for construction of rural roads in the State of Jharkhand and one of such agreement is Agreement No. HSCL/ RNC/TC/PMGSY/AGT/2014-15/256 dated 08.10.2014 executed by and between the Petitioner and one M/s Hindustan Steelworks Construction Limited for construction of rural road. The petitioner had filed all the applicable return under the Jharkhand Value Added Tax Act, 2005 (hereinafter referred to as the JVAT) showing the entire amount arising out of various contract agreements including the above agreement (Annexure-1) as Gross Turnover (excluding tax) to the tune of Rs.5,82,66,796.00 and applicable tax has been paid over the same (Annexure- 2). The principal employer had also deducted required TDS @ 4% from the payment made to the Petitioner under Section 44 of the JVAT Act, 2005 read with Rule 23 of the Jharkhand Value Added Tax Rules, 2006 and issued Certificate of Tax Recovery at Source in Form JVAT 400 to the Petitioner (Annexure-3). As the petitioner had paid VAT over the entire gross amount, it was neither required to pay any service tax over the said amount nor required to take registration under the Finance Act, 1994 or even required to file any return in this regard. In other words, none of the provisions of Finance Act, 1994 was applicable to the petitioner. 3. The case of the petitioner is that, it has been served with an ex- parte order-in-original No.13/ST/Addl Commr/2022 dated 01.02.202, served upon the petitioner on 23.04.2022, passed by respondent No.2; whereby the Adjudicating Authority has confirmed the demand as made in purported Show Cause Notice dated 29.09.2020 by confirming the demand of service tax of Rs. 76,38,197/- u/s 73(1) of the Finance Act, 1994 including the confirmation of interest u/s 75 of the said Act and imposition of penalties u/s 77 and 78 of the same. 4. Mr. Biren Poddar, learned senior counsel for the petitioner submits that from perusal of the aforesaid impugned ex parte order-in-original dated 01.02.2022 (Annexure-4), it would transpire that a show cause notice dated 29.09.2020 including subsequent notices dated 16.11.2021, 24.11.2021, 03.12.2021 and 04.01.2022, were said to be issued to the petitioner for 3 personnel hearing, but none of those notices were ever been served upon the petitioner at any point of time. He further submits that all those above notices were issued on the address “C/o Gyanendra Pandey, Bhandar, Bishrampur, Palamau-822124; whereas the address of the petitioner, as appearing in Form 26AS with the Income Tax Department is “C/o Anil Kumar Singh, Sahijna, Garhwa-822101” (Annexure-5). He further contended that in the Impugned ex-parte order-in-original dated 01.02.2022 (Annexure-4), it is mentioned that the Respondent Department has also obtained the data of TDS under 26AS from the Income Tax Department, wherein the original address of the petitioner was mentioned (Annexure-5), but the purported SCN and other notices were served on the said address of the petitioner (Annexure-6 series). Mr. Poddar further contended that even the purported Demand-cum- Show Cause Notice was issued to the petitioner is without following the mandatory provisions of issuance of pre-consultation show cause notice, as provided in the Master Circular No. 1053/02/2017-CX dated 10.03.2017 issued by the Central Government (Annexure-7). 5. Per contra, Mr. P. S. Pati, learned counsel for the respondents have contested the plea inter alia on the following grounds: (i) The petitioner was provided 04 (four) personal hearing opportunities as per Section 33 A of the Central Excise Act made applicable to the Finance Act, 1994 under Section 83 (inserted vide Finance Act, 2005 w.e.f. 13.05.2005). Further, all the said personal hearing letters dated 09.11.2021; 17.11.2021; 26.11.2021 & 22.12.2021 were served to the petitioner through registered post as well as on the e-main ID [e-mail] associated with GSTIN 20AASFA6687K1ZY of the petitioner (Annexure-C & D). (ii) The address for correspondence as provided by the Income Tax Department under Third Party data reads the address of the petitioner as C/o GYANENDRA PANDEY BHANDAR BHANDAR BISHRAMPUR PALAMAU JHARKHAND and the show cause notice as well as Personal hearing notices were communicated on the same. Further, the same were also communicated to the petitioner through registered e-mail id also. (iii) The address of correspondence in show cause notice was used as 4 per the available record with the department and data shared by the Income Tax Department. (iv) The order in original No. 13/ST/ Addl. Commr./ 2022 Dated 01.02.2022 passed by the Additional Commissioner, CGST & CX, Ranchi was passed keeping in view the principles of natural justice. A copy of the order-in- original was served through registered post through the office of the Range Superintendent bearing Speed post tracking No. EJ891183753IN and the same was delivered to the petitioner (Annexure-E). (v) Last but not the least, the instant writ petition at this juncture is premature and the same is not at all maintainable as the show cause notice has been rightly issued and there is no jurisdictional error or the same has not been issued on baseless grounds. The case has been adjudicated following the principles of natural justice. The petitioner has recourse to appellate mechanism, as provided under Section 35 of Central Excise Act, 1944 made applicable to the matters of service tax by virtue of Section 83 of Finance Act, 1994. The Hon’ble Supreme Court in the matter of CIT V. Chhabil Dass Agarwal, reported in (2014) 1 SCC 603 had held that when a statutory forum is created by law for redressal of grievances, writ petition should not be entertained ignoring said statutory dispensation. Accordingly, the instant writ petition being pre-mature; the same is liable to be dismissed in limine. 6. Having heard learned counsel for the parties and after going through the documents available on record and the averments made in the respective affidavits it would transpire that in the counter affidavit filed by the respondent CGST, it has been specifically admitted by them that show cause notice dated 29.09.2020 was served to the petitioner through registered post with consignment No. EJ784354171IN as well as on their e-mail id [e-mail] as per data shared by the Income Tax Department. (Para-6 and Annexure-A & B at page 17 & 18 of counter affidavit). It is further evident from perusal of paragraph -2 (iii), 2 (iv), paragraph- 17 and 18 of the writ petition, wherein it has been specifically stated by the petitioner that “Gyanendra Pandey, Bhandar, Bishrampur, Palamu” to whom the SCN as well as notices for personal hearing were alleged to have been sent is the Advocate of the petitioner for income tax purposes; although the reply of the said paragraphs have been given in paras-8, 9 and 21 of the CA, but the said facts have not been disputed and or denied by the Respondents and further from 5 bare perusal of Annexure-A & B of Counter Affidavit, it transpires as under: (i) E-mail ID [e-mail] belong to one Gyanendra Pandey, Bhandar, Bishrampur, Palamu, who was the Advocate of the Petitioner regarding Income Tax matter. (ii) Consignment No. EJ784354171IN was also appears to be sent on the aforesaid address i.e., Gyanendra Pandey, Bhandar, Bishrampur, Palamu, who was the Advocate of the Petitioner regarding income tax matter, which would be evident from page-45 and 46 of the writ application. 7. Further from perusal of Annexure-C and D of counter affidavit, it clearly transpires that the aforesaid notices for personal hearing were sent to the advocate of the Petitioner, whose e-mail ID was given only in application for new registration. As a matter of fact, from the counter affidavit, it clearly transpires that all the notices of personal hearing was served on the petitioner through registered post as well as on the email ID [e-mail] and all the correspondences has been made on the address i.e. Gyanendra Pandey, Bhandar, Bishrampur, Palamu provided by IT Department Interestingly from bare perusal of Annexure-5 at page-61 of the writ petition, it is evident that in Form 26AS the correct address of the petitioner is mentioned i.e. “Aman Raj Construction, C/o Sri Anil Kumar Singh, Sahijna, Garhwa, Jharkhand-822101” but despite the same, SCN as well as notices for personal hearing were sent on the Advocate of the petitioner and the impugned ex-parte order has been sent on the wrong and/or mistaken address of the petitioner, which subsequently corrected and delivered to the petitioner on 23.04.2022 on its correct address i.e. “Aman Raj Construction, C/o Sri Anil Kumar Singh, Sahijna, Garhwa”, which is evident from Annexure-A of SA filed by the petitioner. 8. Having regard to the aforesaid admitted position, we are having no hesitation in holding that the impugned ex-parte O-I-O is hit by principles of natural justice and thus, the writ is also maintainable as per judgment of Hon’ble Apex Court passed in the case of Whirlpool case for following reasons:- (i) Section 73 (1) of the Finance Act, 1993 provides to serve notice on the person chargeable with the service tax, but in the instant case as admitted by the Respondents, the SCN as well as the notices of personal hearing were served on the advocates of the petitioner, which is not a valid service of notice u/s 73 (1) of the Finance Act, 1994. (ii) No show cause notice has been served upon the petitioner before passing the impugned ex-parte order-in-original No. 13/ST/Addl Commr/2022 6 dated 01.02.2022 on the correct address. (iii) No notice of personal hearing before passing the impugned exparte order-in-original No. 13/ST/ Addl Commr/ 2022 dated 01.02.2022 has ever been served upon the petitioner, at any point of time. (iv) Further, the impugned ex-parte order has initially been sent on the wrong and/or mistaken address of the petitioner, which was subsequently corrected and delivered to the petitioner on 23.04.2022 on its correct address i.e. “Aman Raj Construction, C/o Sri Anil Kumar Singh, Sahijna, Garhwa” Therefore, this writ petition deserves to be allowed, as the impugned ex-parte O-I-O is hit by principle of natural justice and also the demand is not leviable on the petitioner. 9. Accordingly, the instant application is allowed and the impugned order dated 01.02.2022, passed by Additional Commissioner, Central Goods & Service Tax, Ranchi (Respondent No.2), is hereby quashed and set aside. The matter is remitted back to the respondent Department-Additional Commissioner, Central Goods & Service Tax and Central Excise, to pass a fresh order after giving proper opportunity of hearing to the petitioner-assessee strictly in accordance with the provisions of law and following the principle of natural justice. 10. As a result, the instant writ application is partly allowed in the manner indicated herein above. Pending I.A., if any, is also disposed of. (Rongon Mukhopadhyay, J.) (Deepak Roshan, J.) Pramanik/ "