Radiance Services A Hindu Undivided Family represented by its Kartha Mr. Suresh Rao V. The Assistant Commissioner of Central Tax West Division - 5, Bengaluru West Commissionerate

WP/5453/2023

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The case involves Radiance Services, a Hindu Undivided Family, represented by its Kartha Mr. Suresh Rao, who challenged an ex parte order by the Assistant Commissioner of Central Tax, which deemed their services as taxable under the Finance Act, 1994, for the financial year 2017-18. The petitioner argued that they were not given adequate opportunity to respond to the Show Cause Notice, as the business was closed and premises vacated by December 2017. The respondent maintained that notices were sent to the registered address. The court found that the petitioner was not properly served and that material circumstances warranted a reconsideration of the case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 798540 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 30-03-2023
• Assessment Year: misc
• Laws Referred To: Finance Act, 1994
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PREETHA MAHADEVAN
• Assessee Lawyers: PRADYUMNA H
• Keywords: Assessment; Ex parte order; Interest; Penalty; Show cause notice; Tax demand; Taxable service
• Section: 65B; 67(1)

Judgement Text

"- 1 - WP No. 5453 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF MARCH, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 5453 OF 2023 (T-RES) BETWEEN: RADIANCE SERVICES A HINDU UNDIVIDED FAMILY REPRESENTED BY ITS KARTHA MR. SURESH RAO S/O LATE SHRI S. LAKSHMAN RAO, AGED ABOUT 62 YEARS, NO. 99, 1ST CROSS, LAKESHORE GARDEN THINDLU, VIDYARANYAPURA, BENGALURU - 560 097. …PETITIONER (BY SRI. PRADYUMNA G. H., ADVOCATE) AND: THE ASSISTANT COMMISSIONER OF CENTRAL TAX WEST DIVISION - 5, BENGALURU WEST COMMISSIONERATE, 1ST FLOOR, BMTC BUS STAND, BANASHANKARI, BENGALURU - 560 070. RESPONDENT (BY MS. PREETHA MAHADEVAN, CGSC) Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - WP No. 5453 of 2023 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH ORDER-IN ORIGINAL BEARING NO 152/2021-22 (C.NO.V/24/51/2022 WD-5 DIN 20220357YU000000CE6C) DATED 17.03.2022 (ANNXURE-E) PASSED BY THE RESPONDENT. THIS PETITION, COMING ON FOR PRELIMINARY HE1ARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has impugned the respondent’s Order dated 17.03.2022 [Annexure-E] opining that the petitioner's activity would be 'taxable' service as contemplated under Section 65B of the Finance Act, 1994 [for short, 'the Finance Act'] and that the petitioner would be liable to pay tax for such service rendered during the financial year 2017-18 [upto June 2017] under Section 67[1] of the Finance Act. The respondent has raised consequential demand for tax, interest and penalty. The impugned order is admittedly an ex parte order. The respondent has recorded that though Show Cause Notice is issued and different personal hearing dates are fixed over a period of one year, the - 3 - WP No. 5453 of 2023 petitioner has neither filed any response nor participated in the personal hearing, and if the petitioner despite these opportunities does not file response or participate in the personal hearing, the assessment must be closed. While Sri. Pradyumna G H, the learned counsel for the petitioner, argues in support of the petition relying upon Annexure-D, a communication sent to the respondent after coming to know about the impugned assessment order, Ms. Preetha Mahadevan, the learned Central Government Standing Counsel, submits that the notices as mentioned in the impugned order are sent to the address as found in the registration certificate and therefore there cannot be any complaints of lack of opportunity. However, it is seen from Annexure-D, one of the petitioner's responses after the impugned order, that the petitioner is categorical that the business is - 4 - WP No. 5453 of 2023 closed in the month of December 2017 and the business premises is vacated. This fact remains uncontested. Further, the respondent has concluded the assessment for the period between 01.04.2014 to 31.03.2015 based on the values as found in the petitioner's income tax returns for the relevant year and for the subsequent years 2015-16 and 2016-17 [upto June 2017] based on 20% increase over the previous financial year turnover. In this regard the petitioner's case is that this is notwithstanding the payment of tax in routine course as evidenced by different challans marked as exhibits to this petition. This Court, because of lack of service of Show Cause Notice on the petitioner is undisputed and material circumstances have to be considered to decide on the petitioner’s liability, is of the considered view that the impugned order must be quashed, and the proceedings restored for reconsideration. Hence the following: - 5 - WP No. 5453 of 2023 ORDER The petition is allowed, and the impugned order dated 17.03.2022 [Annexure-E] is quashed and the proceedings restored to the respondent for reconsideration after due notice to the petitioner at the address as now filed with the respondent. Sd/- JUDGE AN/- "