9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (2) TMI 676 - HC - Service TaxDemand of service tax - service of clearing and forwarding - Bar of limitation - Held that - On the material date on which the impugned show cause notice was issued, the period of limitation for issuing a show cause notice was one year from the relevant date. - Any show cause notice would necessarily have to be restricted to demand for a period of one year preceding the date of the show cause notice or at best within a period of five years preceding the date of the show cause notice if extended period of limitation was invocable. In no circumstances could any show cause notice have been issued in respect of a demand which arose more than five years prior to the date of the show cause notice. Under Rule 6 of the Service Tax Rules, 1994 as they stood at the material time, service tax was to be paid to the credit of the Central Government by the 5th day of the month following the calendar month in which payment towards the value of the taxable service was received. In case of electronic transfer through internet banking, payment could be made within the 6th day of that month, that is one day later. Limitation would thus start running from the seventh day of the month following the calendar month in which payment for the taxable service had been received by the petitioner. - The onus is on the authority issuing the show cause to disclose relevant facts in the show cause notice or documents annexed therewith to show that the show cause notice was within one year from the relevant date, or in case of invocation of the proviso to Section 73(1) of the Finance Act, within five years from the relevant date. Even when the extended period of limitation is invoked in terms of the proviso to Section 73(1) of the Finance Act, sufficient particulars of the alleged fraud, collusion or wilful misstatement would have to be given in the show cause notice to enable the assessee to give a meaningful and effective reply thereto. Similarly, for the same reason particulars have to be given of the facts allegedly suppressed. - The show cause notice is the foundation on which the document has to build up its case. The allegations in the show cause notice thus have to be specific. If the allegations in the show cause notice are vague, unintelligible and lacking in material particulars the Court would be obliged to hold that the noticee had not been given proper opportunity to meet the allegations indicated in the show cause notice. The Court would thus be obliged to set aside such a notice. It is well-established that the revenue cannot invoke the extended period of limitation where facts leading to the show cause notices were already known to the revenue as held by the Supreme Court in Commissioner of Central Excise, Baroda v. Sotex reported in 2006 (11) TMI 39 - SUPREME COURT OF INDIA . It is also well-established that subsequent change of opinion with regard to the taxability of any service does not justify a show cause notice upon invocation of the extended period of limitation. Reference may in this context be made to the judgment of the Supreme Court in P&B Pharmaceutical (P) Ltd. v. Collector of Central Excise reported in 2003 (2) TMI 68 - SUPREME COURT OF INDIA . - A show cause notice issued upon invocation of the extended period of limitation as provided in the proviso to Section 73(1) on the ground of contravention of Chapter V cannot be sustained in law, unless the authority issuing the show cause notice is able to demonstrate intention to evade payment of Service Tax on the part of the assessee. The extended period of limitation can be invoked when there is a conscious act to evade tax, for example deliberate non-disclosure of some bills pertaining to any particular taxable service rendered by the assessee. Similarly, if an assessee withholds information in spite of requisition to provide the same, with intention to evade tax, the assessee would be guilty of wilful suppression. - In any case, it is reiterated, at the cost of repetition, that as observed above, in no circumstances could any show cause notice have been issued in respect of a demand which arose over five years ago. The impugned notice is thus patently barred by limitation. Extended period of limitation was invocable the show cause notice in the instant case is not even within the extended period of five years from the date on which service tax became payable. - petitioners have not even been able to give particulars of any bills which were realized in the half year ending on 31st March, 2005 except for one bill allegedly realized on 27th October, 2004. - The impugned show cause notice is barred by limitation. - Decided in favour of assessee.
Issues Involved:
1. Validity of the show cause notice issued after the period of limitation. 2. Conditions for invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994. 3. Jurisdiction of the authority to issue the show cause notice. 4. Availability of alternative remedy and maintainability of the writ petition. 5. Specificity and sufficiency of particulars in the show cause notice. Issue-wise Detailed Analysis: 1. Validity of the show cause notice issued after the period of limitation: The petitioner challenged the show cause notice dated 23rd April, 2010, which demanded Service Tax for the period from 1st April, 2004 to 9th September, 2004. The court noted that under Section 73(1) of the Finance Act, 1994, the limitation period for issuing a notice was one year from the relevant date, extendable to five years in cases of fraud, collusion, wilful misstatement, suppression of facts, or contravention of provisions with intent to evade tax. The court held that the entire demand in the impugned notice was ex facie barred by limitation as more than five years had elapsed from the relevant date. 2. Conditions for invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994: The court emphasized that the extended period of limitation could only be invoked if there was evidence of fraud, collusion, wilful misstatement, suppression of facts, or contravention of provisions with intent to evade tax. The court found that the impugned notice did not provide sufficient particulars of any such acts. It was held that mere failure to declare does not amount to wilful suppression, and there must be a positive act on the part of the assessee. The court concluded that the conditions precedent for invoking the extended period were absent. 3. Jurisdiction of the authority to issue the show cause notice: The court reiterated that the question of limitation is a jurisdictional issue. It held that an authority has no jurisdiction to issue a show cause notice barred by limitation. The court noted that the jurisdiction to issue a notice after the expiry of one year but within five years requires a finding of fraud, collusion, wilful misstatement, suppression of facts, or contravention of provisions with intent to evade tax. Since the impugned notice did not meet these criteria, it was held to be without jurisdiction. 4. Availability of alternative remedy and maintainability of the writ petition: The respondents contended that the petitioner had an alternative remedy of adjudication before the Adjudicating Authority. However, the court held that the existence of an alternative remedy does not bar the maintainability of a writ petition, especially when the impugned notice is without jurisdiction or barred by law. The court cited several precedents, including Whirlpool Corporation v. Registrar of Trade Marks and State of Punjab v. Bhatinda District Cooperative Milk P. Union Ltd., to support its position. 5. Specificity and sufficiency of particulars in the show cause notice: The court held that a show cause notice must be specific and provide sufficient particulars to enable the assessee to give a meaningful and effective reply. The impugned notice was found to be vague and lacking in material particulars, thereby violating the principles of natural justice. The court concluded that the notice did not fulfil the statutory conditions for issuance and was incapable of effective reply. Conclusion: The court set aside the impugned show cause notice dated 23rd April, 2010, as it was barred by limitation and did not meet the conditions for invoking the extended period of limitation. The writ application was disposed of accordingly.
|
