Calcutta HC Dismisses Writ Petition Against Ex Parte Service Tax Order for Non-Appearance, Citing Availability of Alternate Remedy [Read Order]

Chandra Sekhar Singh,petitioner-assessee,filed a writ petition seeking to quash the ex parte order dated 21st January 2022, passed by the Assistant Commissioner, Central Tax.Through this order, a service tax demand of ₹3,85,041 was raised along with interest under section 73(1) of the Finance Act, 1994, read with section 174 of the Central Goods and Service Tax (CGST) Act, 2017.

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A penalty of the same amount was also imposed under section 78 of the Finance Act, citing non-payment of service tax and alleged violations of rule 6 of the Service Tax Rules, 1994, and section 68 of the Indian Evidence Act, 1872.

The petitioner counsel submitted that the ex parte order dated 21st January 2022 directed payment of ₹3,85,041 as service tax along with interest and an equal amount as penalty. He requested that the order be treated as a show cause notice and that the petitioner be given an opportunity of hearing before the adjudicating authority. He also asked for a reasoned order to be passed after considering the petitioner’s response.

He referred to an unreported decision in MAT 2387 of 2023, where the Division Bench treated a similar order as a show cause notice and directed further action only after granting a hearing.

Opposing this, counsel for the CGST Authority, argued that the petitioner was given sufficient opportunity but failed to appear, leading to the ex parte order. He noted that the order was appealable, and the petitioner neither filed an appeal within the prescribed time nor took any steps for nearly two years. He relied on a Supreme Court decision to state that writ petitions should not be entertained once the appeal period has lapsed.

Justice Partha Sarathi Chatterjee heard both sides and went through the records.It found that the petitioner was given hearing dates on 9th December 2021, 23rd December 2021, and 19th January 2022 through letters sent to the registered address. Despite receiving the notices, the petitioner did not appear, leading to the ex parte order dated 21st January 2022.

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The Court noted that the order was appealable and that an alternative remedy was available. Although the petitioner claimed the order was passed during the Covid-19 period, the Court observed that there was a lack of diligence in pursuing the matter.

As a result, the Court found no reason to interfere and dismissed the writ petition without costs.However, it clarified that the petitioner was free to file an appeal as per law and could cite the pendency of this writ petition to explain any delay.

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