Facts of the Case

The petitioner, Jijabrao A. Patil, proprietor of Jai Shrikrishna Enterprises, Dhule, was subjected to an audit in 2016 with respect to service tax on works contract services, during which correspondence was addressed to his old address at Professor Colony, Dhule. On 28 July 2018, the petitioner was issued a registration certificate under the CGST Act reflecting a new address — Bombay Agra Highway, Bombay Agra Road, Nardana Dhule. A show-cause notice dated 22.12.2020 and the consequent Order-in-Original dated 30.11.2022, confirming a service tax demand of Rs. 4,26,78,295/-, were both sent to the petitioner's old address and returned unserved. The petitioner learned of the Order-in-Original only when his chartered accountant visited the department's office, following which he requested copies on 03.04.2023; the department supplied them on 21.04.2023, confirming both documents had indeed been addressed to the old address.

Issues Involved

  1. Whether issuance of the show-cause notice and Order-in-Original at the petitioner's old address, despite his updated address being on record in his GST registration certificate, violated principles of natural justice.

Petitioner's Arguments

  • Both the show-cause notice and the Order-in-Original were sent to the old address and returned unserved, a fact admitted by the respondents themselves in their letter dated 21.04.2023.
  • The respondents ought to have issued the show-cause notice at the new address, which was appearing on their own portal via the petitioner's GST registration certificate, and their failure to do so violated principles of natural justice, warranting quashing of the impugned proceedings.

Respondent's Arguments

  • The petitioner ought to have separately informed the respondents about the change of address, and the respondents were therefore justified in issuing the show-cause notice at the old address.
  • The respondents did not dispute that the notice and Order-in-Original sent to the old address were returned "undelivered," nor did they dispute that the new address appeared in the registration certificate issued on 28.07.2018.

Court Order / Findings

  • The Court held that since the petitioner had informed the respondents of his new address, as evident from the registration certificate issued by the respondents themselves, the respondents ought to have issued the show-cause notice at that new address; having failed to do so, the impugned Order-in-Original was passed without affording the petitioner an opportunity of hearing and was liable to be quashed.
  • The Order-in-Original dated 30.11.2022 was quashed and set aside.
  • The respondents were directed to reissue the show-cause notice dated 22.12.2020 at the petitioner's new address, hear the petitioner, and pass an order within twelve weeks of the personal hearing, with all contentions of the parties kept open.

Important Clarification

Where a taxpayer's current address is already on record with the department by virtue of a subsequently issued registration certificate (such as under GST), the department cannot justify sending a show-cause notice or final order to an old, superseded address merely because the taxpayer did not separately intimate the change — doing so violates natural justice and renders the resulting order liable to be quashed and remitted for a fresh notice and hearing at the correct address.

Sections Involved

  • Central Goods and Services Tax Act, 2017 – under which the petitioner's registration certificate, reflecting the updated address, was issued and relied upon to establish that the department had actual knowledge of the correct address.
  • Finance Act, 1994 (Service Tax provisions) – the substantive law under which the underlying show-cause notice and demand were issued.

Decision – In Favour of

The decision was in favour of the Assessee, with the Order-in-Original quashed and the matter remitted for a fresh show-cause notice at the correct address, followed by a personal hearing and a fresh order.

Case Details

  • Court: High Court of Judicature at Bombay, Civil Appellate Jurisdiction
  • Case Number: Writ Petition No.6774 of 2023
  • Coram: G.S. Kulkarni and Jitendra Jain, JJ.
  • Date of Order: 17 October 2023

Link to Download the Order

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