Jharkhand HC: Non-appearance of Assessee Before Adjudicating Authority Not Breach of Natural Justice

The Jharkhand High Court in a recent ruling, overlooked a writ petition filed via a proprietorship firm engaged in civil contract work, contesting the Order-in-Original (OIO) passed by the Additional Commissioner of Central GST & CX, Ranchi.

It was noted that the taxpayer had been furnished with numerous opportunities to attend proceedings before the adjudicating authority. The court emphasized that personal hearing invitations were dispatched to the Assessee at the address listed in their GST registration, as well as via email. Regrettably, these efforts proved unsuccessful, as the letters were returned undelivered, and the Assessee failed to respond to the emails.

The division bench of Justices Rongon Mukhopadhyay and Deepak Roshan saw that “It is further evident that the Assessee was given ample opportunity to appear before the adjudicating authority but he failed to do so.

The letters of personal hearing were issued to him at the address “M/s Rajeev Kumar, Lukiya Petarwar, Bokaro Steel City, 827001” provided by petitioner-assessee in their GST registration but the letters were returned undelivered. It further transpires that the letters were also sent to the assessee through e-mail ID i.e. rajeevkumar020180@gamil.com which was available to the department but the taxpayer did not answer the stated letters.

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Thus, the contention of the Assessee that the principle of natural justice has not been complied with is misplaced and misconceived and without any basis. As a matter of fact, in para-9 and 10 of the impugned Order-in-Original, the adjudicating authority has clearly stated giving details of the opportunity provided to the Assessee. As such the contention of non-fulfilment of natural justice is not sustainable in the background of this case, the bench mentioned.

In this instance, the petitioner, a proprietorship firm involved in civil contract work, provided construction services to government offices in Jharkhand and Bihar during the fiscal year 2016-17. The petitioner contended that no service tax was to be applied under Serial Number 13 of Notification No. 25/2012-ST, on 20.06.2012. In September 2021, the petitioner received notification from the office of respondent No. 2, the Additional Commissioner of Central GST & CX, regarding an ongoing investigation concerning alleged non-registration under service tax and non-payment of service tax for the financial year 2016-17.

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Owing to COVID-related restrictions, the petitioner submitted written responses and supporting documents via email in response to the notices issued. Despite the petitioner’s prompt response, a demand-cum-show cause notice was subsequently issued, followed by a scheduled personal hearing on 04.01.2023. Unfortunately, the petitioner missed the hearing date because they did not regularly check their email. Consequently, the challenged Order in Original (OIO) was issued against the petitioner.

The Applicant’s Requested Remedies

• To overturn the Order-in-Original No.20/S.Tax/ADC/RAN/2023 issued via the Additional Commissioner, GST, and CX, Ranchi, because of the breach of natural justice and ignoring the response of the applicant excluding the consideration.
• To cancel the demand-cum-notice to show cause on 24.09.2021 provided via Respondent No.2, about the levying of service tax, interest, and penalties for the FY 2016-17.
• To guide the adjudicating authority in issuing the fresh order acknowledging the petitioner’s submissions and documents furnished through the email dated 13.09.2021.

After a comprehensive examination of the arguments presented by both parties, an in-depth review of the statements contained in their respective affidavits, the attached documents, and a thorough scrutiny of the contested Order-in-Original, the court observed that the petitioner had not responded to the Show Cause Notice (SCN).

The court took note of the fact that the date for a personal hearing had been scheduled four times, specifically on 27.10.2022, 25.11.2022, 07.12.2022, and 04.01.2023, yet the petitioner losses to attend any of these events.

Furthermore, the court underscored that the petitioner referred to Annexures 2, 2/1, and 2/2, claiming to have responded to the notice. However, during the investigation, it became evident that this reply was furnished at the time of the inquiry stage and not in response to the SCN.

The court clarified that the response sent by the petitioner, directed to the Superintendent, Range-1, Div-II, Bokaro, related to pre-SCN questions that the Range Officer incurred. The applicant did not respond to the actual SCN itself.

Regarding paragraphs 9 and 10 of the disputed Order-in-Original, the court stressed that the adjudicating authority had meticulously documented the opportunities afforded to the taxpayer. Consequently, the argument of non-compliance with the principles of natural justice was found to be without merit in this case.

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The court concluded, “Accordingly, we are of the considered opinion that no error has been committed by the adjudicating authority in passing the impugned Order-in-Original, inasmuch as, enough opportunities were provided to the petitioner by issuing SCN and also fixing date of personal hearing for four times; but the petitioner did not respond to either of them.”

Having regard to the aforesaid discussions and admitted position with regard to non-submission of reply to the SCN, we failed to appreciate the contention of the petitioner that the principle of natural justice has not been complied with in the instant case. Since there is an efficacious alternative remedy provided in the Act itself, we hold that the instant writ application is not maintainable, the court completed, subsequently overlooking the application.