The Madras High Court has advised to approach the appellate authority with regards to the imposition of service tax and penalty without issuing proper Show Cause Notice or providing proper opportunity for hearing.
The petitioner, a contractor working under the PWD Department of the Government of Tamil Nadu, has raised concerns regarding the imposition of service tax and penalty for services rendered to the government.
The issue of the petition lies in the fact that the impugned order, demanding service tax and penalty, was issued without serving any show cause notice to the petitioner. Furthermore, the petitioner only received the impugned order after their bank accounts were attached by the second respondent, highlighting procedural irregularities.
The petitioner’s legal counsel argued that the impugned order was passed without affording the petitioner an opportunity for a personal hearing, which is a violation of procedural fairness. As a result, the petitioner has approached the court seeking redress.
It was also noted that a similar issue was previously addressed by the Division Bench of the Principal Seat of the Court in W.P.No.24996 of 2019, dated 30.11.2022. The Division Bench directed contractors in similar situations to appeal to the appropriate authority, subject to complying with pre-deposit requirements under Section 35F of the Central Excise Act, 1944, as applicable to the Finance Act, 1994.
The Standing Counsel for the respondents acknowledged that the Division Bench’s order has been upheld by the Honourable Supreme Court in Special Leave to Appeal (C) Nos.7181 to 7199 of 2023, dated 10.04.2023.
The writ petition is disposed of by the bench of Justice B. Pugalendhi granted liberty to the petitioner to file a statutory appeal before the Appellate Authority within four weeks from the receipt of a copy of the court’s order. The Appellate Authority is instructed to consider the appeal expeditiously, taking into account the previous orders of the Court and the Honourable Supreme Court. No costs are imposed on the parties.
As a consequence, all related miscellaneous petitions are closed.
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