Srinivas Engineering Works Vs Additional Commissioner of Central Tax (Karnataka High Court)
The Karnataka High Court partly allowed a writ petition challenging an Order-in-Original dated 13.12.2022 passed under the Finance Act, 1994, along with the consequential demand for service tax, interest, and penalty. Although the order was appealable under Section 107 of the Act, the petitioner invoked the writ jurisdiction of the High Court, contending that the impugned order had been passed ex parte without due service of notice or an opportunity of hearing.
The petitioner further submitted that the proceedings were based on information furnished by the Income Tax Department pursuant to an arrangement between the Central Board for Direct Taxes and the Central Board for Indirect Taxes. Reliance was placed on earlier decisions of the High Court where similar matters had been restored for reconsideration after granting due opportunity.
The Court observed that, despite the petition being filed nearly four years after the impugned order, the petitioner’s assertion regarding lack of notice and denial of opportunity required consideration. The Court also noted that the petitioner intended to rely upon statutory provisions to contest the underlying tax liability. Holding that these circumstances ought to be examined before fastening liability, the Court quashed the Order-in-Original and demand notice, restored the proceedings for fresh consideration, and directed that the petitioner should not be non-suited on the ground of delay.
