2007 (9) TMI 112 - HC - Service Tax

Letter of demand issued without giving opportunity to assessee to represent his case and without issuing SCN Letter raising demand of Service Tax was actually advisory in nature and not a demand letter Hence, the present Writ-petition is pre-mature and not maintainable

Summary

Issues:
Challenge to demand for service tax without proper show cause notice under Section 73 of the Finance Act, 1994.

Analysis:
The petitioner filed a writ petition seeking to quash a letter demanding service tax of Rs.1,85,47,826/- without a proper show cause notice under Section 73 of the Finance Act, 1994. The main contention was that the respondents lacked the authority to demand service tax through a letter without giving the petitioner an opportunity to represent its case. The respondents insisted on the payment of service tax for construction services without initiating any proceedings or issuing a show cause notice. The petitioner challenged the impugned letter dated 08.03.2007, issued by the third respondent, on various grounds, emphasizing the absence of a show cause notice and proper proceedings.

Counter Affidavit:
In response, the respondents, represented by the Assistant Solicitor General, denied the petitioner's contentions. They argued that the letter in question was advisory in nature, advising the petitioner to remit the service tax to the government account. It was clarified that the letter was not a demand order but aimed to inform the petitioner about its service tax liability. The respondents asserted that they would adhere to the due procedure established by law when demanding payment of service tax. They contended that the writ petition was premature as the letter was advisory and not a demand order, suggesting that there was no cause of action for the petitioner to file the petition.

Court Decision:
After considering the arguments from both sides, the Court concluded that the writ petition was premature and not maintainable at that stage. The Court opined that the petitioner could challenge the appropriate proceedings of the respondents in the future, in accordance with the law, when issued. Consequently, the Court disposed of the writ petition without costs, indicating that the petitioner could revisit the matter when necessary.