Facts of the Case

The petitioner, a proprietorship engaged in civil construction contract work for government offices in Bihar and Jharkhand, challenged an Order-in-Original dated 07.02.2023 confirming a service tax demand for FY 2016-17, raised through a demand-cum-show cause notice dated 24.09.2021. The petitioner's stand was that no service tax was payable per Sl. No. 13 of Notification No. 25/2012-ST, and that he had submitted his written reply with supporting documents by email dated 13.09.2021 in response to earlier pre-SCN queries, which the adjudicating authority failed to consider. Personal hearing notices were issued on four occasions — 27.10.2022, 25.11.2022, 07.12.2022 and 04.01.2023 — but the petitioner did not respond to or attend any of them, citing that he was not in the habit of checking email daily.

Issues Involved

  1. Whether the writ petition was maintainable despite the availability of an alternative statutory remedy, on the ground of alleged breach of natural justice.
  2. Whether the adjudicating authority erred in not treating the petitioner's earlier email response (Annexure-2 series) as a reply to the formal show cause notice.

Petitioner's Arguments

  • The respondent had erred in not considering the reply and documents already submitted on 13.09.2021 (Annexure-2, 2/1, 2/2), which addressed the very allegations later contained in the show cause notice dated 24.09.2021.
  • Non-compliance with principles of natural justice rendered the writ petition maintainable despite the alternative remedy, relying on Anil Kumar v. Presiding Officer, Whirlpool Corporation v. Registrar of Trade Marks, and ABL International Ltd. v. Export Credit Corporation; arguments on merits were also advanced.

Respondent's Arguments

  • The petitioner was afforded ample opportunity through hearing notices on four separate dates but neither filed a reply to the SCN nor attended any personal hearing, so the natural-justice plea was misconceived, and the petitioner should be relegated to the statutory alternative remedy under the Act.

Court Order / Findings

  • The Court found that the petitioner's earlier email (Annexure-2 series) was sent at the pre-SCN enquiry stage to a different officer (Superintendent, Range-1, Div-II, Bokaro) and did not constitute a reply to the SCN dated 24.09.2021, to which admittedly no reply was ever filed.
  • The Court held that personal hearing letters were sent to the petitioner's registered address and email but returned undelivered/unanswered, and since the petitioner was given ample opportunity across four separate dates yet chose not to respond, the contention of breach of natural justice was misplaced and unsustainable on the facts.
  • Holding that an efficacious alternative remedy existed under the Act, the Court declined to entertain the writ petition, holding it not maintainable, and dismissed it accordingly.

Important Clarification

A plea of breach of natural justice to bypass an efficacious alternative statutory remedy will not succeed where the assessee was afforded multiple genuine opportunities to respond to a show cause notice and attend personal hearings, but failed to avail any of them; an earlier reply submitted at the pre-SCN enquiry stage, to a different officer, cannot be equated to a reply to the formal show cause notice for this purpose.

Sections Involved

  • Finance Act, 1994 (Service Tax provisions) — governs the levy and adjudication of service tax for the pre-GST period in dispute (FY 2016-17).
  • Notification No. 25/2012-ST — the exemption notification relied on by the petitioner for non-taxability of certain construction services.

Decision – In Favour of

In favour of the Department — the writ petition was dismissed as not maintainable, leaving the petitioner to pursue the statutory appellate remedy.

Case Details

  • Court: High Court of Jharkhand at Ranchi
  • Case Number: W.P.(T) No. 1617 of 2023
  • CNR / Citation: W.P.(T) No. 1617 of 2023
  • Coram: Hon'ble Mr. Justice Rongon Mukhopadhyay & Hon'ble Mr. Justice Deepak Roshan
  • Date of Order: 12 September 2023

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