No Proof of Service of Service Tax Demand Order: Madras HC quashes Order [Read Order]

The Madras High Court has quashed the service tax demand order for the Assessment Year 2011- 12 to 2015-16 as found that there is no proof of service of the demand order.

The petitioner, engaged in the manufacture of power supplies, electronic goods, chargers for mobile phones, and similar items, operates from a Special Economic Zone. A show cause notice was issued to the petitioner on 18.04.2017, which was duly responded to by the petitioner on 16.05.2017.

Subsequently, upon receiving a personal hearing notice in December 2020, the petitioner responded accordingly. However, the impugned order was issued in January 2021 without being served on the petitioner, and the petitioner became aware of it only upon receiving communication dated 10.07.2023. Upon immediate request, the order was enclosed with a communication dated 26.02.2024.

The petitioner's counsel argued that similar issues were resolved in favour of the petitioner for other assessment years, indicating a strong case on merits. Furthermore, counsel points out the violation of Section 73(4B) of the Finance Act, 1994, regarding the time limit for determining service tax liability.

Mr. Ramesh Kutty, Senior Standing Counsel, confirmed receipt of notice for the respondents. He highlights that the impugned order was communicated to the petitioner via speed post on 03.02.2021. Additionally, he referred to a previous judgment by the Telangana and Andhra Pradesh High Court and subsequent dismissal of the Special Leave Petition by the Supreme Court, indicating a precedent in favour of the petitioner.

Upon examination of the Order-in-Original and the legal context, the high court bench of Justice Senthilkumar Ramamoorthy noted that there is no evidence of the impugned order being served on the petitioner.

Consequently, the impugned order was quashed, and the matter was remanded for reconsideration by the 1st respondent. The 1st respondent was instructed to provide a reasonable opportunity to the petitioner, including a personal hearing, and to issue a fresh order within three months from the date of receipt of a copy of this order.

To Read the full text of the Order CLICK HERE

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