Mr. Morthala Sidda Reddy v. The Union of lndia

Petitiorr under section 't 51 cPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased direct the R'3spondents to withdraw all the recovery proceedings, including garnishee an,l bank attachment actions initiated pursuant io the order-in-original dated 25l02li?.022, and permit the petitioner to operate all bank accounts and receive payrlents from their clients and Government Departments without obstruction. lA NO: 2 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased Direct Respondents No.6 and 7 to forthwith release the payments due to the petitioner towards the works already executed and completed in accordance with the terms of the respective Government contracts, without being influenced by the impugned proceedingd. : lA NO: 3 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased lssue directions to Respondents No. 8 to 11 to immediately defreeze and restore operation of the petitioner's bank accounts, so as to enable the petitioner to carry on legitimate business activities and discharge ongoing financial obligations. Counsel for the Petitioner: MS CHITTI PRATHYUSHA Counsel for the Respondent No 1: SRI B MUKHERJEE REPRESENTING sRt N BHUJANGA RAO, DEpUTy SOLIC|TOR GENERAL OF |NDIA Counsel for the Respondents No 2 To 5 : SRI DOMINICS FERNANDES SENIOR SC FOR CBIC Counsel for the Respondents No 6 To 11 : -- The Court made the following: ORDER HONOURABLE SRI IUSTICE P.SAM KOSHY AND HON'BLE SRI IUSTICE SUDDALA CHALAPATHI RAO N Date:19.1L.2025 Between: Mr. Mortharla Sidda ReddY, s/o.Iate Mr. Morthala Rama Narsi Reddy' Aged abou t 52 yeats, r / o'18-1'-120 / 2, Rilshaw ColonY, DivYa High School, Bhadrachalam, Bhadradri Kothagudem' Telangana And The Unior of lndia, rep.by its Revenue Secretary' Revenue l)epartment, Ministry of Finance' 1,28/ A, Norih Block, New Delhi and l'0 others' .. Petitioner ... Respondents oRDER: (per Hort',ble sri lustice suddala chalapathi Rao) Heirrd Ms. Chitti Prathyusha, learned counsel for the petitioner, Mr. B.Mukherjee, learnccl cottnsel representing Mr. N.l3hujanga Rao, learnecl t)eputy Solicitor General of India for respondent No'1 and Mr' Dominicr; Fernandes, learned Senior Standing Counsel for CBIC for respondent Nos.2 to 5'

2. Tkre present writ petition is filed challenging the show-cause norice dated 28.12.2020 (DIN: 20201256YQ000088D30) culminating the Orcler-irr-Original datecl 25.02.2022 passecl by the resporrdent No-3 arrd the or.cler-in-Appeal No.HYD-SVT'AX-RRC-APPI-056-25-26 dated i. I I I \ 2

26.08.2025 passed by the respondent No.2-Commissioner (Appeals-l), Hyderabad, as arbitrary, illegal, violative of the principles of natural justice and without jurisdiction, and consequently prayed to set aside the said proceedings in entirety; and also along with other alternative prayer to quash the impugned Order- in-Appeal dated 26.08.2025 passed by the respondent No.2.

3. The brief facts of the case are that on verification of information received from the Income Tax Authorities for the financial years 2075-16 and 201,6-17, the 3rd respondent had come to the notice that the writ petitioner had declared his income to a tune of Rs.2,99,22,061,f - and Rs.7,47,77,077/- respectively. Further, in lris lncome Tax Returns for the said period, the writ petitioner has not filed the ST-3 returns. As the writ petitioner did not respond to the departmental correspondences which were initiated to ascertain the service tax liability on the said income of the writ petitioner. As there was no response by the writ petitioner on several correspondences, the 3'a respondent construed the said income to be consideration received for the taxable services rendered by the writ petitioner in terms of Section 72 of Finance Act, 1994, as the income for financial year 2076-17 with a value addition of 20% took it as basis for detern'rining the value of services for the period {t April to !une, 2017 of the writ petitioner on pro-rata basis, accordingly :i J issued tl^e impugned show-cause notice in o.R.No.20s/zozo- Adjn(ADC)-s1. dated 28.1.2.2020 to the appellant demanding service tax liability as Rs.72,20,229/- determining the said amount as the service tax component on the aforesaid income along with interest under the provisions oi sections 73(1) and 75 of the Finance Act, 7994, and has also proposed penalty on the petitioner under Sections T7 and 78 , ibid,. Late of was also demanded in the said notice in terms of Section 70 of Finance A.t, 7994 read with Service Tax Rules ,1gg4.

4. It is contended by the writ petitioner that he was engaged in providing works contract services to various State Government Departme.ts, such dS, construction of schoor buildings, court complexes, public roads, parking areas for Godavari puskaralu, MLA Camp offi:es and other public utility projects during the period April, 2015 to June, 2077. Further, it was contended that the writ petitioner was registerecl under the lncome Tax Act, 1967 with pAN No.AJAPIV[55B5F ancl cruring the rerevant period, the writ petitioner was not registered under the service Tax law and was unde r bona fide impression based on his departmental enquiries that his activities in execution ,rf civil works for Government Deparfments are exempted from the Ie vy of service tax and stated ,nu, h!fius declared a turnover of Rs-2,99,22,067 / - for the financiar year 20,rs-1.6 and Rs.1, 47,77,077 /_ for 4 the financial year 201'6-17.It was further contended that the respondent Nos'2 and 3 have initiated enquiry proceedings. pursuant thereto issued notices to the writ petitioner, on the registered address, however, these communications have not come to the notice of the writ petitioner. It was further contended that the respondent No.3 had issued a notice dated 28.72.2020 bearing DIN: 20201256ye0000g88D30 proposing ro treat his entire turnover as taxable and estimated a furnover for April to June, 2017 under section 72 of the Finance Act, 1994 and that the saicl demand notice was issued for an amount of Rs.72 ,20,229 / - proposing to levy service tax, interest and penalty. tt was further stated by the writ petitioner that during the said period, the writ petitioner was suffering from Covid-l9 infection and suffered due to post_infection complications and the entire matter was entrusted to his consultant, who was also got affected with Cov id-lg infection, owing to the sarne there was no reply to the show-cause notices and the notices of personal hearings fixed by the 3'd respondent on 02.L2.2027, 77.12.2021 and

73.01-2022 were returned un-served and thereafter, the respondent No.3 despite of non-service of notices, proceeded to hold an enquiry and passed ex parte Order-in-original dated 25.02.2022 zride No.5g/2021_22_ Adjn.(ADC)-Sr. 5

5. It is contended by the writ petitioner that thereafter collection of Order-in-Original in March, 2022, certain clarifications were made by the consultant and the appeal could not be filed as the tax consultant, who was handing the said case also fell seriously ill due to post covid- 19 irrfectiotl ancl sustained multiple organ failure was bedridden for consideratrle period and passed away on 01.10.2024.It is stated that as such, the matter could not be represented properly before the 3,d respondert, Ilowel'er, after reconstruction of record, the writ petitioner has filed etn Appeal before the 2n.r respondent in Appeal No.49/202s_ RR-sr challenging the orders passed in o-I-o No.5g/2021_22_ Adjn(ADCI)-sr, dated 2s.02.2022. The said Appeal was dismissed by the 2nd respondentuide orders dated 26.08.2025 as there is substantial delay which cdrrnot be condoned by the authority. Now the instant writ petition is filed assailing the show-cause notice and also the appellate orders passed by the 2',.r responclent c{ate d 26,0g.2024. 6' The main contention of the writ petitioner in the instant writ petition is that there is no proper service of notice and that as the writ petitioner and also the consurtant, who was handling the affairs of the writ petiti,ner was suffering from severe Covid-19 comprications and passed aw)yin the year 2024and that th" 3,r*pondent, who was the adjudicati.g officer, r,r,itrrou$rhere being any proper service of notices, \ \ 6 has passed the orders by holding out that the writ petitioner was liable for the service tax component out of the contract works made by him during the assessment years 2015-16 and 2016-17. Further, as the 3..t respondent herein has also freezed the accounts of the writ petitioner after reconstruction of the records, the writ petitioner has filed the appeal before the 2n.l respondent with a abnormal delay of more than 2lz years and the 2nd respondent, upon perusing the material on record and the facts of the case, dismissed the appeal on the ground that it is barred by limitation observing that the delay is beyond the condonable period of his jurisdiction, which cannot be condoned by the )ntt respondent in view of the decision of the Hon'trle Apex Court in the case of Sambhu Synthetic Private Limited vs. Commissioner, Customs aideFinal Order No.51203 of 2021dated 01,.04.2021,.

7. As seen from the record, the adjudicating authority though issued several notices'to the writ petitioner to his registered address and also posted the matter on three occasions for personal hearings on

02.12.2021,17.1,2.2021. and 13.01.2022, the writ petitioner was constantly absent and notices returned undelivered and as such, the 3'd respondent passed the order on 25.02.2022. The order of the 3'd respondent dated

25.02.2022 was challenged before the 2n,t respondent in Appeal u,ith a abnormal delay of more than 2lzyears which was eventually dismissed 7 on26.08.2025. More so, in the affidavit filed in the present writ petition also, writ petitioner has not brought out sufficient grounds so as to condone the delay even when the notices are sent to the registered address of the petitioner, he was constantly absent and also failed to aPfear in the hearings before the 3'.1 respondent, that too in the instant case there is .nordinate and abnormal delay of more than 2 % years. The writ petitioner has not stated sufficient and valid grounds for condonatiorr of such inordinate clelay. The Hon'ble Apex Court in Pathapati Subba Reddy (Died) by Legal Representatiaes & Others a. speciay Deputy collector (LAy and Estate officer, Haryana Llrban t I Deaelopmen,t Authority €t Another a. Gopi Chand Atreja2, wherein the Hon'ble Apt:x Court held that inordinate delay has to be explained properly, so as to entitle the petitioner for condonation. In the instant case, the writ petitioner has not state'd sufficient grounds so as to enable this Court to condone the delay in filing the appeal before the 2nd respondent ;Lnd in such facts and circumstances of the case, this Court is not inclinecl to entertain the writ petition against the inordinate delay in filing the ap1:eal before the 2nd respondent that too for about more than 21/z years. ffifqftr '.1ZOZ+) l2 Supre ne Courr Cases 3j6 '(20te)4scc6 2 # 8

8. In our considered view, the writ petitioner has not made out any substantial grounds so as to interfere into the order passed by the 2na respondent dated 26.08.2025. The 2n.l respondent is justified in rejecting the appeal filed after a considerabte delay and laches. The writ petition is devoid of merits and is accordingly liable to be dismissed. 9. Therefore, the Writ Petition is hereby dismissed. There shall be no order as to costs. Pending miscellaneous applications if any shall stand closed. To, SD/. A.SREENIVASA //TRUE COPY/ SECTION OFFICER

1. One CC to SRI CHITTI PRATHYUSHA Advocate 2. One CC to SRl. N BHUJANGA RAO Deputy Solicitor loPUCl : of lndia,

3. one cc to SRI DoMlNlcs FERNANDES SENIOR SC FOR CBIC, [oPUCl 4. Twb CD Copies DAN GJP $d I I THE S ( o ,i! 0 { r[8 2020 * * HIGH COURT DATED:1911112025 ORDER WP.No.3:5134 of 2025 DISMISSING THE WRIT PETITION WITHOUT COSTS .,,P