2018 (1) TMI 1136 - HC - Service Tax

Cognizance taken against the accused persons - section 83 of the Finance Act, 1994 and Section 14 of the Central Excise Act, 1944 - Held that - it is not a penal provision, wherein the Court can 958/2008, take cognizance of such provision. Even Section 14 of the Central Excise Act is tices with not a penal provision which only prescribes the procedure for summoning a witness - Section 14 of the Central Excise Act says that it is empowered to summon pliance of persons to give evidence and to produce document in the inquiry. Therefore, the long with alleged order of taking cognizance under the above said provisions is bad in law today. It is clearly a non-application of mind by the Judicial Officer before passing the impugned order. Further, the learned counsel has also submitted as noted above with regard to the jurisdiction, no order has been passed by the trial Court. Therefore, in my opinion, these two important aspects has to be considered by the trial Court. If the Court does not take cognizance of the offence, it cannot proceed with the case by summoning him. The order dated 21-4-2016 passed by the Principal Senior Civil Judge & CJM, Mangaluru, in PC No. 16/2016 in taking cognizance under the above said provisions is hereby quashed. However, the matter is restored on to the file of the Trial Court to pass appropriate orders - appeal allowed in part.

Summary

Issues:
1. Cognizance taken against accused persons under Section 83 of the Finance Act, 1994 and Section 14 of the Central Excise Act, 1944.
2. Jurisdiction of the Mangaluru Court in relation to transactions taking place in Hyderabad.

Analysis:
Issue 1: The petitioners argued that the cognizance taken against the accused persons under Section 83 of the Finance Act and Section 14 of the Central Excise Act was improper as these sections are procedural and not penal provisions. Section 83 of the Finance Act pertains to the application of certain provisions of the Central Excise Act in relation to service tax, indicating it is not a penal provision. Similarly, Section 14 of the Central Excise Act deals with summoning witnesses and does not constitute a penal provision. The Court noted that the order of taking cognizance under these provisions lacked proper consideration and application of mind by the Judicial Officer. The Court emphasized that if the Court does not take cognizance of the offense, it cannot proceed with the case by summoning the accused, and there is no duty on the part of the accused to explain the procedural aspects of these sections. The Court deemed the proceedings as a mechanical process and thus ordered to quash the proceedings.

Issue 2: The petitioners contended that the Mangaluru Court lacked jurisdiction as the transactions in question occurred in Hyderabad. The Court acknowledged this argument and directed the matter to be restored to the Trial Court for proper consideration. The Court instructed the Trial Court to review the contents of the complaint and the allegations made therein, particularly regarding the offense punishable under Section 174 of the IPC. Additionally, the Magistrate was directed to assess its jurisdiction before making any decisions on the complaint lodged by the complainant. The Court partially allowed the petition with these observations.

In conclusion, the High Court quashed the order of taking cognizance under Section 83 of the Finance Act and Section 14 of the Central Excise Act, directing the Trial Court to reevaluate the matter. The Court also highlighted the importance of considering jurisdictional issues before proceeding with legal actions.