Rama Varma Club v. Joint Commissioner of Central Tax and Central Excise, Ernakulam Division

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE GOPINATH P.** ## **FRIDAY, THE 11[TH] DAY OF JUNE 2021 / 21ST JYAISHTA, 1943** ## **WP(C) NO. 11527 OF 2021** ## **PETITIONER:** RAMA VARMA CLUB CLUB ROAD, ERNAKULAM, COCHIN-682 011, REP. BY ITS SECRETARY. BY ADVS. K.JAJU BABU (SR.) M.U.VIJAYALAKSHMI BRIJESH MOHAN ## **RESPONDENT:** THE JOINT COMMISSIONER OF CENTRA L TAX AND CENTRAL EXCISE ERNAKULAM DIVISION, 4TH FLOOR, CENTRAL EXCISE BHAVAN, KATHRIKADAVU, KALOOR, COCHIN 682 017. BY ADV DENNIS VARGHESE ## **OTHER PRESENT:** THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.06.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP (C) No.11527/2021 -2- ## **J U D G M E N T** ## **Gopinath, J:** The petitioner, the Rama Varma Club, Kochi, faced with a demand for payment of service tax, remitted the tax under protest, after objecting to the demand. The petitioner claims that after the decision of the Supreme Court in _**State of West Bengal v. Calcutta Club Ltd.** (2019) 19 SCC 107,_ the question of imposing the liability of service tax in respect of service rendered to members does not arise for consideration. The petitioner submitted Ext.P5 application dated 12-10-2020 seeking refund of the service tax remitted under protest. Certain clarifications were sought from the petitioner which was provided by the petitioner through Ext.P6. On 05-02-2021 Ext. P7 show cause notice was issued calling upon the petitioner to show cause as to why an amount of Rs.65,28,934/-, covered by the claim for refund should not be rejected. As the hearing on the show cause was scheduled immediately on 19-02-2021, the petitioner through Ext.P9 sought for adjournment of the hearing on Ext.P7 show cause notice. Considering that application the hearing was posted to 03-03-2021. The petitioner filed Ext.P11 application seeking a further adjournment, citing the reason of the COVID-19 pandemic. The respondent adjourned the hearing to 25-03-2021 and an E-mail dated 03-032021 was sent to the petitioner informing it that the hearing would be on WP (C) No.11527/2021 -3- 25-03-2021. On 25-03-2021, the petitioner did not appear before the respondent and the matter was adjudicated _ex-parte_ , in the absence of the petitioner. 2. I have heard Sri. Jaju Babu, the learned Senior Counsel appearing on the instructions of Sri. Brijesh Mohan, the learned Counsel appearing for the petitioner and Sri. Dennis Varghese, the learned Standing Counsel appearing for the respondent. 3. The learned Senior counsel would submit that due to COVID-19 lock down, the club was closed from March 2020 to December 2020. He also submits that there was a substantial increase in the number of persons infected during February-March of 2021 and that Maharashtra and Kerala accounted for nearby 70% of the COVID cases in the country at that point of time. He would submit that due to COVID spread, the club was practically not functional during the period in question and that only minimal staff were deployed. He would also point out that the notice fixing the hearing on 25-03-2021 was communicated only through E-mail and it escaped the attention of the office bearers. He would submit that it was only after Ext.P12 was received that the E- mail dated 03-03-2021 fixing the hearing on 25-03-2021 was traced out. 4. The learned Standing Counsel for the respondent would submit that a reading of Ext.P12 order would show that several opportunities were WP (C) No.11527/2021 -4- extended to the petitioner. He submits that the Department was bound to consider an application for refund within a time frame and hence liberal adjournments could not be granted. He submits that the petitioner has adequate alternative remedy against Ext.P12, the writ petition should not be entertained in the matter. He also submits that the giving of notice through E- mail and conduct of hearing through video conferencing was the accepted mode during the pandemic. 5. Having considered the submissions across the bar, I am of the considered opinion that one more opportunity can be extended to the petitioner to present its case before the respondent. It is true that a person who did not avail of the opportunity for hearing cannot later complain about violation of principles of natural justice. However, considering the fact that Ext.p11 request was made citing the COVID-19 pandemic and considering the fact that it the specific case of the petitioner that E-mail dated 03-03-2021 fixing the date of hearing on 25-03-2021 had not come to the notice of any of the office bearers of the petitioner, it is only appropriate such opportunity is extended to the petitioner. In such a situation, one cannot forget the classic statement of the law by Megarry.J in _**John**_ **v.** _**Rees**_ (as referred to in _**S.L. Kapoor v. Jagmohan**_ , (1980) 4 SCC 379 at page 392) “ _It may be that there are some who would decry the importance which the courts attach to the observance of the rules of natural justice. ‘When_ WP (C) No.11527/2021 -5- _something is obvious’, they may say, ‘why force everybody to go through the tiresome waste of time involved in framing charges and giving an opportunity to be heard? The result is obvious from the start’. Those who take this view do not, I think, do themselves justice. As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change. Nor are those with any knowledge of human nature who pause to think for a moment likely to underestimate the feelings of resentment of those who find that a decision against them has been made without their being afforded any opportunity to influence the course of events.”_ It is settled law that when an order is passed in violation of the principles of natural justice the availability of an alternative remedy is not a bar for exercise of the jurisdiction under Article 226 of the Constitution of India. Accordingly, I set aside Ext.P12 and direct that the respondent shall adjudicate Ext.P7 show cause notice afresh within a period of one month from the date of receipt of a certified copy of this judgment. The petitioner shall not seek any further adjournment in the matter and it shall attend the hearing on the date fixed by the respondent. The petitioner shall also intimate to the office of the respondent the E-mail address to which the notice of hearing must be sent by the respondent, within two working days of the receipt of a copy of this WP (C) No.11527/2021 -6- judgment. This is to ensure that there is no complaint regarding non-receipt of any notice fixing the date for hearing. I make it clear that I have not expressed any opinion on the merits of the matter. The writ petition will stand disposed of accordingly. Sd/- **GOPINATH P. JUDGE** ## **AMG** ## **/true copy/** ## **ASSISTANT REGISTRAR** WP (C) No.11527/2021 -7- ## **APPENDIX OF WP(C) 11527/2021** PETITIONER'S EXHIBITS - Exhibit P1 TRUE COPY OF THE SHOW CAUSE NOTICE NO. 215/2014/ST DATED 07/10/2014 ISSUED BY THE RESPONDENT TO THE PETITIONER. - Exhibit P2 TRUE COPY OF THE OBJECTION DATED 05/02/2015 VIDE NO. RVC/595/02/2015 SUBMITTED BY THE PETITIONER TO THE RESPONDENT. - Exhibit P3 TRUE COPY OF THE LETTER DATED 30/04/2015 SUBMITTED BY THE PETITIONER TO THE SUPERINTENDENT OF CENTRAL EXCISE. - Exhibit P4 TRUE COPY OF THE ORDER IN ORIGINAL NO. 10/2020 (REFUND) DATED 10/06/2020 ISSUED BY THE RESPONDENT ALONG WITH TYPED COPY. - Exhibit P5 TRUE COPY OF THE FORM-R APPLICATION DATED 12/10/2020 ALONG WITH COVERING LETTER NO. RVC/1335/10/2020 SUBMITTED BY THE PETITION TO THE ASSISTANT COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE. - Exhibit P6 TRUE COPY OF THE SUBMISSION DATED 02/02/2021 VIDE NO.RVC/011/2021 SUBMITTED BY THE PETITIONER TO THE ASSISTANT COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE. - Exhibit P7 TRUE COPY OF THE SHOW CAUSE NOTICE NO. 3/2020 (REFUND) DATED 05/02/2021 ISSUED BY THE RESPONDENT TO THE PETITIONER. Exhibit P8 TRUE COPY OF THE NOTICE DATED 12/02/2021 ISSUED BY THE RESPONDENT TO THE PETITIONER. Exhibit P9 TRUE COPY OF THE APPLICATION DATED 17/02/2021 SUBMITTED BY THE PETITIONER TO THE ASSISTANT COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE. Exhibit P10 TRUE COPY OF THE NOTICE DATED 22/02/2021 ISSUED BY THE RESPONDENT TO THE PETITIONER. WP (C) No.11527/2021 -8- - Exhibit P11 TRUE COPY OF THE APPLIATION DATED 01/03/2021 VIDE NO. RVC/023/03/2021 SUBMITTED BY THE PETITIONER TO THE ASSISTANT COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE. - Exhibit P12 TRUE COPY OF THE ORDER IN ORIGINAL NO. 03/2021 (REFUND) DATED 31/03/2021 ISSUED BY THE RESPONDENT. - Exhibit P13 TRUE COPY OF THE GOVERNMENT ORDER DATED 29/03/2021 VIDE GO (RT) NO. 353/2021/DMD ISSUED BY THE GOVERNMENT OF KERALA. Annexure A1 TRUE COPY OF THE LETTER DATED 03/03/2021 SENT VIA EMAIL.