The Bombay High Court ruled that mere writing of order and keeping it in the file without serving it to the assessee would be no order in the eye of law.
The petitioner, Greatship (India) Ltd. is that it is a company incorporated under the Companies Act, 1956 and is engaged in the business of providing specialized services to persons involved in the exploration and production of oil and natural gas. The services include carrying of man and material between offshore rigs/installations and onshore using vessels of the petitioner and providing drilling services by using the vessels owned or chartered by the petitioner. Customers of the petitioner include public sector undertakings such as Oil and Natural Gas Corporation Ltd. (ONGC) as well as private entities such as Reliance Industries Ltd. etc.
It is stated that being a service provider, the petitioner had discharged service tax under the Finance Act, 1994 at the prevailing rate during the financial year 2015-16. The total service tax paid by the petitioner during the said year was Rs.208,98,43,288.
There was a complete hiatus and no consequential steps were taken by the respondent. Be it stated that the limitation period for making assessment under section 23(2) of the MVAT Act for the financial year 2015-16 was five years.
When just about two weeks were left before expiry of the limitation period, respondent telephonically informed the petitioner about personal hearing on 16.03.2020 and asked the petitioner to participate in such hearing. However, the respondent was not available in office and therefore no hearing took place. The petitioner made multiple telephone calls to the respondent for personal hearing but no such hearing materialized. Ultimately, petitioner submitted before respondent that for the financial year under consideration the relevant documents had already been submitted and sought for a personal hearing.
It is stated that without providing any opportunity of hearing and without considering the documents submitted, respondent No.3 passed the two impugned orders allegedly determining tax liability of the petitioner at Rs.76,30,03,372 along with interest and penalty under the MVAT Act and also determining tax liability of Rs.4,97,56,627 under the Central Sales Tax Act, 1956 together with interest and penalty.
The petitioner submitted that the orders that were served upon the petitioner were digitally signed on 22.07.2020 bearing manual signature purportedly dated 20.03.2020. However, those could not be downloaded from the portal of MVAT department till 04.10.2020. It is further stated that though the orders bore the signature of the officer having the date of 20.03.2020, it is nothing but a reproduction of the order received by the petitioner on 23.07.2020. Clearly it is an attempt to circumvent the bar of limitation.
The division bench of Justice Milind N.Jadhav and Ujjal Bhuyan held that an order has to be made known either directly or constructively to the party affected by the order in order to enable him to prefer an appeal. Mere writing of order and keeping the same in file would be no order in the eye of law. The order must be communicated either directly or constructively.
Therefore, the court set aside the impugned orders of assessment allegedly dated 20.03.2020 and the related notices of demand also allegedly dated 20.03.2020.
Subscribe Taxscan Premium to view the Judgment
Support our journalism by subscribing to Taxscan AdFree. We welcome your comments at info@taxscan.in
