The Hon’ble High Court of Meghalaya vide its order dated 26.09.2022 in the matter of M/s Barua and Company Pvt. Ltd. Vs. Union Of India & Ors. in WP (C) No. 262/2022 with MC (WPC) No. 128/2022, set aside the order passed on the basis that the assessee had due notice and knowledge of dates of hearing fixed, however, it was contended by the petitioner as well as found by the Hon’ble Court that notices were sent to E-mail address which does not belong to the Assessee and therefore, it does not amount to proper service. Further, it was found that the Department has failed to discharge the burden of proving that the notices for hearing had been served on the assessee.
The Petitioner filed the writ petition before the Hon’ble High Court challenging the order dated 25th May, 2022, whereby the petitioner has been made liable to pay service tax in excess of 1.45 crore along with interest and penalty.
Petitioner’s Submissions: –
- It was submitted on the behalf of the petitioner that the impugned order has been passed without affording the petitioner an opportunity of hearing.
- Further the recording/finding in the impugned order that the notices dated April 7, 2022, April 22, 2022 and April 29, 2022 were apparently served on the petitioner, is not true as no such notice was received by the petitioner either at its registered office or at the unit in Shilong.
Respondents’ Submissions: –
- It was submitted on the behalf of the Respondents that Show cause notice was duly received by the assessee, however, the subsequent notices dated April 7, 2022, April, 22, 2022 and April 29, 2022 were issued to an e-mail address furnished by the authorized representative of the assessee.
- Further, it has been ignored that the impugned order dated 25 May, 2022, clearly mention that the notices dated April 7, 2022, April, 22, 2022 and April 29, 2022 were apparently served on the assessee on April 20, 2022, April 29, 2022 and May 13, 2022, respectively.
In response, it was vehemently denied on the behalf of the petitioner that the relevant e-mail address to which the three notices of April, 2022 were issued belonged to the petitioner and such address had been provided by an authorized officer of the petitioner.
- The Hon’ble Court after considering the submissions made and facts of the case, found that there is no dispute that an appeal lies from the impugned order. However, it has been submitted on the behalf of the writ petitioner that order was passed without affording the petitioner any opportunity of hearing. Therefore, it was found by the Hon’ble Court that when the impugned order which needs to be challenged in appeal, is against the principles of natural justice or without jurisdiction or patently absurd, the writ court may not exercise the usual self-restraint in guiding the complainant to the appellate forum and entertain the writ petition itself, for the reason as there is hardly a need to go into the merits of the case in such a scenario.
- Further, it was found by the Hon’ble Court that the impugned order has been passed on the basis that the assessee had due notice and knowledge of dates of hearing fixed but the assessee had failed to be represented in course thereof. However, now it appears that the assessee may not have received any of the three notices said to have been issued by email in April, 2022, the order impugned may not have any legs to stand on.
- It was found that there is no document to show that three notices sent in April, 2022 on the e-mail address, was furnished by the authorized representative of the assessee, though, it was submitted by the department that such information was furnished verbally. Therefore, it is apparent that the Department has failed to discharge the burden of proving that the notices for hearing had been served on the assessee for the assessee to be penalised for not availing of the opportunity of hearing.
- As a result, it is clear that the impugned order dated 25th May, 2022, was passed without hearing to the assessee and without affording the assessee an opportunity of being heard. Since the nature of the order was such that the assessees participation was necessary prior to the same being made, the order impugned dated May 25, 2022 is set aside and the position is set back to the stage of the show-cause notice.
The Hon’ble Court with the above findings, allowed the writ petition by setting aside the impugned order, with the directions to the Department to issue a reasonable notice for hearing to the assessee by email at firstname.lastname@example.org as indicated in the writ petitioner’s affidavit-in-reply. It is made clear that the merits of the matter have not been considered and it will be open to the Department to pass an appropriate order and take necessary steps in accordance with law.