Pepper Square Software Services Pvt. Ltd. Vs Deputy Commissioner of Central Tax (Karnataka High Court)
The Karnataka High Court considered a writ petition challenging an Order-in-Original dated 09.08.2021 passed under the Finance Act, 1994. Although the order was appealable under Section 107 of the Act, the petitioner invoked the writ jurisdiction of the High Court relying on an earlier decision of a co-ordinate Bench in similar matters.
The petitioner contended that the impugned order had been passed ex parte without due service of notice or an adequate opportunity of hearing. It also submitted that the order was based on information furnished by the Income Tax Department under an agreement between the Central Board of Direct Taxes and the Central Board of Indirect Taxes. The petitioner relied on the earlier High Court decision, where proceedings in similar circumstances had been restored for reconsideration after granting due opportunity.
The respondents submitted that, while the earlier undertaking recorded before the Court was intended to ensure consideration of similar complaints, the jurisdictional officers were now empowered to provide an opportunity of hearing and decide such matters on their merits.
The High Court observed that, despite the writ petition having been filed nearly four years after the impugned order, the petitioner asserted that no notice had been served and no opportunity had been granted. The Court also noted that the petitioner intended to rely upon statutory provisions to contend that the transaction did not attract the tax liability in question. It held that these circumstances required consideration before fastening any liability on the petitioner.
