Judgments
Judgments
  1. Home
  2. /
  3. High Court Of Judicature at Allahabad
  4. /
  5. 2014
  6. /
  7. January

Vandana Travels & Tours vs Commissioner (Appeals),Central ...

High Court Of Judicature at Allahabad|23 December, 2014

JUDGMENT / ORDER

1. Heard Sri T.P. Singh, learned Senior Advocate assisted by Sri Siddharth Nandan, learned counsel for the petitioner, Sri Vinod Kant and Sri Ashok Singh, learned Senior Standing Counsels for the respondent nos. 1, 2, 3, 4 and 5 and Sri Gyan Prakash, learned Assistant Solicitor General of India for respondent no. 6.
2. In this writ petition the petitioner has prayed for the following relief:-
(i) Issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 30.1.2014 alongwith the orders dated 11.6.2013, 10.10.2013 and 22.5.2008.
(ii) Issue a writ, order or direction in the nature of mandamus directing the respondent authorities not to take any coercive steps in pursuance of the order dated 30.1.2014 alongwith the orders dated 11.6.2013, 10.10.2013 and 22.5.2008.
Facts of the case.
3. Briefly stated the facts of the present case are that the petitioner is a service provider as Rent-a-cab-operator. He applied for registration under the Finance (No. 2) Act of 1994 (hereinafter referred to as the Act) with the Deputy Commissioner, Central Excise and Service Tax Division-I, Allahabad i.e. respondent no. 2 who issued a registration certificate allotting STC No. "AAEFV4956GST001" vide order dated 4.4.2006 showing address of the petitioner as "Chak Chhatnag Road, Jhunsi, Allahabad". An assessment order dated 16.3.2010 for the period from September, 2000 to September, 2005, October 2005 to March 2006, April 2006 to March 2007 and May 2008 to July 2008 was passed by the jurisdictional assessing authority i.e. respondent no. 2. The petitioner filed an appeal before the Commissioner (Appeal), which was dismissed vide order dated 31.3.2011 due to non-compliance of the condition of pre-deposit.
4. Aggrieved with this order the petitioner filed an appeal before the Customs Excise and Service Tax Appellate, New Delhi, who set aside the orders and remanded the matter to the assessing authority. Since the Assessing Authority had not passed the order pursuant to the remand direction, the petitioner filed Writ Petition No. 160 of 2014 before this Court, which was disposed of vide order dated 12.3.2014 directing the Assessing Authority to decide the matter within one month. Thereafter respondent no. 2 passed the order in original nos. 8, 9, 10 and 12 all dated 17.4.2014 creating certain demands. He also imposed equal amount of penalty under Section 76 of the Act and also penalty of Rs. 1000/- under section 77 of the Act.
5. It is the case of the petitioner that the demand created by the jurisdictional authority i.e. respondent no. 2 has been paid.
6. However, present dispute has arisen because of the admitted facts that a parallel assessment proceedings for the same transactions, same period and in respect of the same amount received by the petitioner from the service recipients i.e. respondent no. 4 was initiated without jurisdiction by the respondent no. 3 i.e. Assistant Commissioner, Central Excise and Service Tax Division-II, Allahabad. An order in original dated 22.5.2008 was passed by him creating a demand of service tax of Rs. 4,53,242/- and penalty of Rs. 9,09,484/- against the petitioner on the basis of another address i.e. "Nirupma House Scheme, 20 Ashrey Stanely Road, Allahabad.
7. It is the case of the petitioner that he came to know about this order for the first time when respondent no. 3 sent the impugned recovery letter dated 11.6.2013 at the actual address/business place of the petitioner asking to deposit service tax of Rs. 4,53, 242/- and penalty of Rs. 9,09, 484/-. Thereafter respondent no. 3 sent a notice dated 13.9.2013 under section 87 (a) & (b) of the Act to the respondent no. 4 directing him to pay to the credit of the Central Government the aforesaid amount.
8. Thereupon the petitioner moved an application dated 30.9.2013 to recall the orders passed by respondent no. 3 on the ground that the jurisdictional authority i.e. respondent no. 2 and has already assessed the petitioner for the same period and transactions. The aforesaid recall application of the petitioner was rejected by the respondent no. 3 vide impugned order dated 10.10.2013 on the ground that the order in original dated 22.5.2008 passed by him was not challenged by the petitioner in appeal.
9. Thereafter the petitioner applied and obtained certified copy of demand-cum-show cause notice issued by respondent no. 3 and the order in original dated 22.5.2008, in order to file appeal before the Commissioner (Appeal). The appeal No. 259 of 2013 filed by the petitioner was rejected by the respondent no. 1 on the ground of delay vide order dated 30.1.2014.
10. In paragraph 37 of the writ petition the petitioner has stated as under:-
"That being aggrieved by the order dated 30.1.2014 the petitioner had preferred a writ petition no. 160 of 2014 but the Court was of the view that since the SCNs/ order in original issued by the office Deputy Commissioner Central Excise Division-I, Allahabad has not attained finality, therefore, it would be appropriate that the same may be decided earlier and a direction was given to decide the pending adjudication, after the remand order dated 25.1.2012 within one month after giving opportunities to all concerned parties, vide order dated 12.3.2014."
11. The afore-quoted paragraph 37 of the writ petition has been replied in paragraph 31 of the counter affidavit of respondent no. 3 dated 3.9.2014 as under:-
"That the contents of paragraph 37 and 38 needs no comments as the same pertains of respondent no. 2."
12. Now the petitioner has filed the present writ petition challenging the order dated 30.1.2014 passed by the respondent no. 1 and the orders dated 11.6.2013, 10.10.2013 and 22.5.2008 passed by respondent no. 3.
Submission on behalf of petitioner.
13. Learned counsel for the petitioner submits that it is admitted case of the respondent Central Excise Department that the jurisdictional assessing authority i.e. respondent no. 2 has passed the order in original creating certain demands for the same periods and in respect of the same transactions. The respondent no. 3 has also passed an ex-parte order in original creating demand. As soon as the petitioner came to know about the unauthorized order in original passed by respondent no. 3, he preferred an appeal before the respondent no. 1 which was rejected only on the ground that it is barred by limitation even though the respondent no. 1 itself recorded a finding of fact that parallel assessment order creating demand has been passed by the unauthorized officer i.e. respondent no. 3. This fact has also been admitted in the short counter affidavit dated 16/18.7.2014 filed by the Commissioner, Central Excise and Service Tax Commissionerate, Allahabad (respondent no. 5), who is highest authority of the Commissionerate, Allahabad and the respondent no. 2 and 3 are subordinate to him. The respondent no. 3 has also not disputed the fact that respondent no. 2 is the jurisdictional authority and order in original in respect of the same periods and for the same transactions have been passed by the respondent no. 2. He, thus, submits that the impugned order dated 22.5.2008 and the consequential orders dated 11.6.2013 and 10.10.2013 are wholly without jurisdiction and without authority of law and are, therefore, complete nullity. He, therefore, submits that these orders should have been withdrawn suo-motu by the respondent no. 3/5 and in any case it should have been withdrawn/recalled when the petitioner moved a recall application. He submits that even the appellate authority has also recorded a finding of fact that parallel assessment proceedings was initiated and order in original has been passed by the respondent no. 3 yet he rejected the appeal on the ground of delay. He submits that entire action of the Central Excise and Service Tax Authorities is wholly arbitrary, illegal and violative of Article 14 of the Constitution of India. He submits that the entire payments of the petitioner due from respondent no. 4 was withheld at the instance of respondent no. 3 in consequence to the impugned attachment orders which are wholly null and void. He made number of other submissions on several occasions which were noted in the orders passed by this Court on different dates. He therefore, submits that the impugned orders may be set aside and the writ petition may be allowed with heavy costs for causing harassment to the petitioner and depriving him the enjoyment of his lawful money. He relied upon the judgment of Hon'ble Supreme Court in the case of Balvant N. Viswamistra and others Vs. Yadav Sadashiv Mule (dead) Through LRS (2004) 8 SCC 706- para 9 and 15, F India and Anothr Vs. Association of Unified Telecom Service Providers of India and Others (2011) 10 SCC 543- Para 59, 60 and 61, N.Nagendra Rao and Company Vs. State of Andra Pradesh 1994 (6) SCC 205 para 8,9,13 to 20, 25 and 29, Lucknow Development Authority Vs. M.K. Gupta, AIR 1994 SC 787 para 8 and 11 and the Division Bench of this Court in the case of Ram Singh and others Vs. State of U.P. and others 2000 UPTC 865 Para 6,7,8 and 15 and the provision of Government (Liability in Tort) Act, 1967 published in the extra ordinary gazette of India Part 2 Section 2 dated 22nd May, 1967 which lapsed.
Submission on behalf of respondents.
14. Sri Vinod Kant and Sri Ashok Kumar, learned Senior Standing Counsels for the Central Excise and Service Tax Department jointly submit that although the fact of parallel assessment proceedings and creation of parallel demand by the respondent no. 3 vide order dated 22.5.2008 are not disputed yet since the impugned order in original dated 22.5.2008 has achieved finality and therefore cannot be recalled and the appeal was lawfully rejected by the respondent no. 1 on the ground of delay. They submit that once the order has achieved finality and the appeal on the ground of delay has been dismissed, the demand is liable to be recovered from the petitioner.
Discussions and Findings.
15. I have carefully considered the submissions of learned counsel for the parties.
16. It is wholly undisputed that the respondent no. 2 is jurisdictional assessing authority of the petitioner. It is also undisputed that the petitioner applied for registration under the Act and the respondent no. 2 issued service tax registration certificate under section 69 of the Act allotting him STC No. AAEFV4956GST001 vide order dated 4.4.2006. In the registration certificate address of the petitioner is shown as Chak, Chhatnag Raod, Jhunsi, Allahabad. It is also undisputed that the respondent no. 2 assessed the petitioner for the period as indicated in para-3 above and finally in remand proceeding he passed order in original nos. 8, 9, 10 and 12 all dated 17.4.2014 creating certain demand and imposing penalty under section 76 and 77 of the Act. It is alleged by the petitioner that he has paid demand.
17. A parallel assessment proceedings was initiated by the respondent no. 3 subsequent to the registration dated 4.4.2006 granted by the respondent no. 2 to the petitioner and an ex-parte order in original dated 22.5.2008 was passed by him against the petitioner for the same period and for the same transactions in respect of which the jurisdictional assessing authority i.e. respondent no. 2 assessed the petitioner. The only ground on which the recall application of the petitioner was rejected by the respondent no. 3 was that ex-parte order in original dated 22.5.2008 passed by him has attained finality inasmuch as it was not challenged in appeal by the petitioner. According to the petitioner he was having no knowledge of the aforesaid ex-parte order in original dated 22.5.2008 and came to know about it when respondent no. 3 sent him recovery letter dated 11.6.2013 followed by notice dated 13.9.2013. Thereafter he preferred appeal no. 259 of 2013 before the respondent no. 1 appellate authority which was rejected on the ground of delay vide order dated 30.1.2014. In the aforesaid order the Appellate Authority also observed as under:-
"But, before summing up and without going into the merit of the case, I would like to mention that as pointed out by the appellant in the grounds of appeal above and documents enclosed with appeal memo that the appellant is carrying out his business in the name "Vandana Travels & Tours", having its registered office at Chak Chhatnag Road, Jhunsi, Allahabad of "Rent-a-cab-operator' service and is registered with the Office of Deputy Commissioner Central Excise Division-I, Allahabad for the purpose of payment of service tax and has been allotted STC Number AAEFV4956GST001. It also appears that the appellant has received parallel SCNs from central Excise Division I Allahabad as well as from the Division-II Allahabad on two different address of the appellants under respective jurisdictions of the Divisions. the department has undertaken parallel adjudication for the same period and the same services provided by the appellant to the same service recipients i.e. from the jurisdiction of central Excise Division I Allahabad as well as from the Division -II Allahabad. It seems that SCN/ order in original issued by the Office of Deputy Commissioner Central Excise Division-I, Allahabad has still not attained finality."
18. In the short counter affidavit dated 16/18.7.2014 filed by the respondent no. 5 it is stated that the petitioner is registered in the office of respondent no. 2 having registration no. AAEFV4956GST001 w.e.f. 4.4.2006 and the respondent no. 2 is jurisdictional authority for the purpose of assessment w.e.f. 4.4.2006. He further stated that parallel adjudication proceedings have been carried out by Division-II (respondent no. 3) Allahabad with respect to the service provided by the petitioner to M/s Iffco.
19. Thus, it is admitted case of the respondents Central Excise and Service Tax Department that the respondent no. 2 is jurisdictional authority of the petitioner with which the petitioner is registered w.e.f. 4.4.2006 and assessment for the period in question has been made by the jurisdictional authority. It is also admitted case of the respondents that respondent no. 3 has no jurisdiction and has passed an ex-parte order for the same period and in respect of the same transactions for which the respondent no. 2 jurisdictional authority has assessed and passed orders in original.
20. Under the circumstances and facts of the case there is no dispute at all that the respondent no. 3 has initiated parallel assessment proceedings against the petitioner and passed ex-parte order in original dated 22.5.2008 in respect of the same transactions and for the same period for which the petitioner was assessed by the jurisdictional assessing authority i.e. respondent no. 2. The only objection taken by the respondents department is that since the petitioner has failed to challenge within limitation the unauthorized ex-parte order dated 22.5.2008 passed by the respondent no. 3 and appeal against it was also rejected on the ground of delay and as such the demand created under the said orders cannot be withdrawn and is liable to be recovered from the petitioner.
21. In my opinion the stand taken by the respondents is not only wholly misconceived but also unfair. Section 66 is charging section which provides for levy of tax on the value of taxable service rendered by a person to another. Section 67 provides for valuation of taxable service. Section 68 provides that every person providing taxable service shall pay service tax at the prescribed rates and in the manner prescribed. Neither the Act nor the rules provides for any double assessment nor it can be permitted in view of the fact that the transaction in question have been assessed by the jurisdictional authority. Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. Thus the order dated 22.5.2008 passed by the respondent no. 3 was a complete nullity and therefore, the demand created thereunder was not legally recoverable from the petitioner.
22. The respondent no. 3 lacked inherent jurisdiction to pass the impugned order dated 22.5.2008 as well as consequential recovery proceedings by order dated 13.9.2013 by respondent no. 3 for recovery of the alleged demand of Rs. 13,62,726/-. The aforesaid recovery order/notice under section 87(a) & (b) of the Act was withdrawn by the respondent no. 3 by order dated 14.8.2014 passed during the pendency of this writ petition. Thus for about one year the petitioner was deprived by the respondent no. 3 of the use of his money of his capital to the tune of amount demanded by the respondent no. 3.
23. It is settled law that if an authority or court lacks inherent jurisdiction to pass a decree or order, the decree or order passed by such authority or court would be non est and void ab-initio. The defect of jurisdiction goes to the root of the matter. It strikes at the very authority of the court to pass the order. Competence of a court to try a case goes to the very root of the jurisdiction, and where it is lacking, it is a case of inherent lack of jurisdiction. Such defect has always been treated as basic and fundamental. Since the respondent no. 3 was not the assessing authority of the petitioner and has passed the impugned order dated 22.5.2008 without jurisdiction and without authority of law and also since the petitioner was assessed by the jurisdictional assessing authority in respect of the same transactions and for the same period and as such the impugned order dated 22.5.2008 and all consequential proceedings initiated by respondent no. 3 were nullity. It may be clarified that there is difference between irregular or wrong order and the order passed without jurisdiction. An erroneous and illegal decision is not necessarily void but if an order is passed by an authority without jurisdiction or without authority of law then it is void.
24. In the case of Balvant N. Viswamitra and others Vs. Yadav Sadashiv Mule (dead) through LRs. and others (2004) 8 SCC 706, (para 9, 10 and 11) Hon'ble Supreme Court held as under:-
9. "The main question which arises for our consideration is whether the decree passed by the trial court can be said to be 'null and 'void'. In our opinion, the law on the point is well settled. The distinction between a decree which is void and a decree which is wrong, incorrect, irregular or not in accordance with law cannot be overlooked or ignored. Where a court lacks inherent jurisdiction in passing a decree or making an order, a decree or order passed by such court would be without jurisdiction non est and void ab initio. A defect of jurisdiction of the court goes to the root of the matter and strikes at the very authority of the court to pass a decree or make an order. Such defect has always been treated as basic and fundamental and a decree or order passed by a court or an authority having no jurisdiction is nullity. Validity of such decree or order can be challenged at any stage, even in execution or collateral proceedings.
10. Five decades ago, in Kiran Singh & Ors. v. Chaman Paswan & Ors., [1955] l SCR 117 this Court declared;
"It is a fundamental principle well established that a decree passed by a court without jurisdiction is a nullity and that its invalidity could be set up wherever and whenever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction......strikes at the very authority of the Court to pass any decree and such a defect cannot be cured even by consent of parties. "
11.The said principle was reiterated by this Court in Seth Hiralal Patni v. Sri Kali Nath, [1962] 2 SCR 747. The Court said:
"Competence of a court to try a case goes to the very root of the jurisdiction, and where it is lacking, it is case of inherent lack of jurisdiction."
25. In the case of Sunita Devi Singhania Hospital Trust and another Vs. Union of India and another, (2008) 16 SCC 365 (para 19) Hon'ble Supreme Court has considered the inherent power of Customs, Excise and Service Tax Appellate Tribunal and held that it has inherent power to recall its own order if sufficient cause is shown therefor, and held as under:-
19. It is true that the period of limitation specified in terms of Sub-Section (2) of Section 129(B) of the Customs Act is required to be observed but the Tribunal failed to notice that it has inherent power of recalling its own order if sufficient cause is shown therefor. The principles of natural justice, which in a case of this nature, in our opinion, envisage that a mistake committed by the Tribunal in not noticing the facts involved in the appeal which would attract the ancillary and/or incidental power of the Tribunal necessary to discharge its functions effectively for the purpose of doing justice between the parties, were required to be complied with.
26. In the case of A.R. Antulay Vs. R.S. Nayak and another, (1988) 2 SCC 602, Hon'ble Supreme Court held in para 82 and 83 as under:-
82.Lord Cairns in Alexander Rodger v. The Comptoir D'escompte De Paris, observed thus:
"Now, their Lordships are of opinion, that one of the first and highest duties of all Courts is to take care that the act of the Court does no injury to any of the Suitors, and when the expression 'the act of the Court' is used, it does not mean merely the act of the Primary Court, or of any intermediate Court of appeal, but the act of the Court as a whole, from the lowest Court which entertains jurisdiction over the matter up to the highest Court which finally disposes of the case. It is the duty of the aggregate of those Tribunals, if I may use the expression, to take care that no act of the Court in the course of the whole of the proceedings does an injury to the suitors in the Court."
83. This passage was quoted in the Gujarat High Court by D.A. Desai, J. speaking for the Gujarat High Court in Vrajlal v. Jadavji (supra) as mentioned before. It appears that in giving directions on 16th February, 1984, this Court acted per incuriam inasmuch it did not bear in mind consciously the consequences and the provisions of sections 6 and 7 of the 1952 Act and the binding nature of the larger Bench decision in Anwar Ali Sarkar's case (supra) which was not adverted to by this Court. The basic fundamentals of the administration of justice are simple. No man should suffer because of the mistake of the Court. No man should suffer a wrong by technical procedure of irregularities. Rules or procedures are the hand-maids of justice and not the mistress of the justice. Ex debite justitiae, we must do justice to him. If a man has been wronged so long as it lies within the human machinery of administration of justice that wrong must be remedied. This is a peculiar fact of this case which requires emphasis.
27. In the case of Union of India vs. Association of Unified Telecom Service Providers of India (2011) 10 SCC 543 Hon'ble Supreme Court referred its judgement in the case of Chandrabhai K. Bhoir Vs. Krishna Arjun Bhoir (2009) 2 SCC 315 and observed in para 59, 60 and 61 as under:-
59. Thus, the Tribunal in its order dated 7.7.2006 has not just decided a dispute on the interpretation of adjusted gross revenue in the licence agreement, but has decided on the validity of the definition of adjusted gross revenue in the licence agreement. As we have already held, the Tribunal had no jurisdiction to decide on the validity of the terms and conditions of the licence including the definition of adjusted gross revenue incorporated in the licence agreement. Hence, the order dated 7.7.2006 of the Tribunal insofar as it decides that revenue realised by the licensee from activities beyond the licence will be excluded from adjusted gross revenue dehors the definition of adjusted gross revenue in the licence agreement is without jurisdiction and is a nullity and the principle of res judicata will not apply.
60. In Chandrabhai K. Bhoir Vs. Krishna Arjun Bhoir this Court relying on Chief Justice of A.P. Vs. L.V.A. Dixitulu, Union of India Vs. Pramod Gupta and National Institute of Technology Vs. Niraj Kumar Singh has held: (Krishna Arjun case, SCC P. 322 para 26) "26... an order passed without jurisdiction would be a nullity. It will be a coram non judice and non est in the eye of the law. Principles of res judicata would not apply to such cases."
60. We accordingly hold that the order dated 7.7.2006 of the Tribunal was not binding on the Union of India even in those cases in which the Union of India did not file any appeal against the order against the order dated 7.7.2006 before this Court.
(Emphasis supplied by me)
28. Applying the principles laid down in the aforesaid decisions of Hon'ble Supreme Court on the admitted facts of the present case that the impugned order dated 22.5.2008 was wholly without jurisdiction and same was passed by the respondent no. 3 in respect of the same transactions and for the same periods with respect to which the petitioner was assessed by the jurisdictional assessing authority i.e. respondent no. 2; I hold that the impugned order dated 22.5.2008 is a complete nullity. The order dated 10.10.2013 passed by the respondent no. 3 rejecting the recall application also cannot be sustained for the reasons mentioned above. The proper course for the respondent no. 3 was to recall the order dated 22.5.2008 when wholly undisputed facts came to his notice that respondent no. 2 is jurisdictional assessing authority who has assessed and passed assessment order in respect of the same transactions and for the same periods. It was a case of creation of a demand of service tax without jurisdiction. The respondent no. 1 in its order dated 30.1.2014 and respondent no. 5 in the short counter affidavit dated 16/18.7.2014 have accepted these facts.
29. Under the circumstances the impugned order dated 30.1.2014 passed by respondent no. 1 and orders dated 22.5.2008, 11.6.2013 and 10.10.2013 passed by respondent no. 3 cannot be sustained and are hereby set aside.
30. In result the writ petition succeeds and is hereby allowed with cost of Rs. 25,000/- on the respondent no. 3 which shall be paid to the petitioner within one month.
Order dated: 23.12.2014 dhirendra/-
(Surya Prakash Kesarwani, J.)
Disclaimer: Above Judgment displayed here are taken straight from the court; Vakilsearch has no ownership interest in, reservation over, or other connection to them.
Title

Vandana Travels & Tours vs Commissioner (Appeals),Central ...

Court

High Court Of Judicature at Allahabad

JudgmentDate
23 December, 2014
Judges
  • Surya Prakash Kesarwani