2017 (4) TMI 1460 - HC - Service Tax

Renting of immovable property service - non-payment of service tax - license endorsement fee - period w.e.f. 1/4/2008 to 31/1/2013 - opportunity of hearing to the petitioner - HELD THAT - In the present case the Show Cause Notice can never be said to be a Show Cause Notice issued by an Authority without jurisdiction. It is a mere Show Cause Notice and the petitioner show cause before the authorities by filing a proper reply and therefore the question of interference by this Court inspite of the fact that a complete mechanism is provided for ventilating the grievance before the authorities does not arise. This Court in similar circumstances has declined to interfere in the matter as it was certainly against the Show Cause Notice. This Court is of the considered opinion that the present Writ Petition is certainly a premature Writ Petition. Petitioner does have a remedy to file a reply to the Show Cause Notice. He does have a remedy to raise all possible grounds before the Addl. Director General Directorate General of Central Intelligence and therefore the admission is declined. Petition disposed off.

Summary

Issues:
Challenge to Show Cause Notice regarding service tax liability for the period from 01/04/2008 to 31/01/2013.

Analysis:
The petitioner, a limited company with a manufacturing unit, challenged a Show Cause Notice issued by the Addl. Director General of Central Excise Intelligence regarding service tax liability for services rendered from 01/04/2008 to 31/01/2013. The petitioner had entered into agreements with another company for the transfer of Brewery License and leasing of manufacturing plant. The respondent Union of India filed a detailed reply, addressing the grounds raised by the petitioner. The petitioner's counsel did not challenge the constitutional validity of the statutory provisions but focused on contesting the Show Cause Notice. The High Court cited previous judgments emphasizing that writ petitions challenging show cause notices should not be entertained prematurely unless there is a clear lack of jurisdiction. The Court highlighted that the petitioner should respond to the notice and raise all arguments during the proceedings before the authority issuing the notice.

In various cases, including Special Director Vs. Mohd. Ghulam and Union of India Vs. Jain Shudh Vanaspati, the Supreme Court held that a mere show cause notice does not infringe any rights and should not be a basis for a writ petition unless it lacks jurisdiction or is wholly illegal. The Court stressed that writ jurisdiction is discretionary and should not be used to quash show cause notices routinely. The High Court declined to interfere, stating that the petitioner had the opportunity to respond to the Show Cause Notice and present all grounds before the Addl. Director General. The Court considered the petition premature and directed the petitioner to file a reply within 30 days, allowing the authority to proceed according to the law. The Writ Petition was disposed of, emphasizing the importance of following due process and exhausting remedies available before challenging such notices in court.