2018 (4) TMI 1232 - HC - Service Tax

Jurisdiction for investigating the service tax matter - centralized registration does not mention any place other than Chennai- transfer of files pertaining to the petitioner s case to the Jurisdictional Authorities/ Officers, viz., the respondents 3 and 4 for further proceedings - Circular No.1056/05/2017-C.X. dt. 29.07.2017 - Held that - It is settled position that summons cannot be quashed or injuncted and this court in the case of Commissioner of Customs, Calcutta v. M.M.Exports 2007 (3) TMI 265 - SUPREME COURT OF INDIA held that the writ petition was not maintainable to quash the summons and dismissed the writ petition. The respondents 1 and 2 have categorically stated that investigation is being carried out and the petitioner was carrying on business in Mumbai and in the Centralised Registration Certificate the Mumbai office was not registered - further, the Circular referred by the petitioner does not make it mandatory for investigation to be transferred to a different location. It is for the investigating authority to take a decision in the matter and it is not for the court under Article 226 of the Constitution of India to issue such a direction in this regard, especially, when the factual matrix appears to be that the petitioner was carrying on business within the jurisdiction of the respondents 1 and 2 - the prayer sought for by the petitioner cannot be granted - petition dismissed.

Summary

Issues:
- Quashing of summons dated 02.01.2018
- Transfer of files to Jurisdictional Authorities
- Interpretation of Circular No.1056/05/2017-C.X
- Jurisdictional authority for investigation
- Legality of summons and jurisdictional challenge
- Power of Customs Officer to summon individuals

Quashing of Summons:
The petitioner, an Advertising Firm proprietor, sought a Writ of Certiorarified Mandamus to quash the summons dated 02.01.2018 issued by the 2nd respondent and to direct the transfer of files to the Jurisdictional Authorities. The petitioner relied on Circular No.1056/05/2017-C.X, arguing that the investigation should be shifted to Chennai based on the circular's conditions. However, the court noted precedents stating that summons cannot be quashed or injuncted, citing Commissioner of Customs, Calcutta v. M.M.Exports and other similar cases. The court emphasized that the petitioner's challenge indirectly aimed at the summons, which was not maintainable, as per legal principles established in previous cases.

Interpretation of Circular and Jurisdictional Authority:
The respondents contended that the petitioner's business activities in Mumbai, not mentioned in the Centralized Registration Certificate, necessitated investigation to safeguard government revenue. The court highlighted the requirement under Rule 4(2) and (3) of the Service Tax Rules, 1994, for the petitioner to register premises or offices involved in centralised billing. The court referenced Circulars empowering the respondents to conduct the investigation. It was emphasized that the factual background did not support the petitioner's prayer for quashing the summons or transferring the investigation to Chennai.

Legality of Summons and Jurisdictional Challenge:
The court discussed jurisdictional challenges raised by the petitioner, citing cases like Ram Narain Bishwanth & Ors. and Devilog Systems India. It was clarified that the investigation covered past transactions, not limited to a singular consignment, as permissible under legal precedents like Commissioner of Customs (Sea) vs. CESTAT, Chennai. The court rejected the petitioner's argument based on jurisdictional issues raised in previous cases, emphasizing the investigative authority's discretion in conducting inquiries.

Power of Customs Officer to Summon Individuals:
The court addressed the power of Customs Officers to summon individuals under Section 108 of the Customs Act. It was noted that any Gazetted officer of the Customs Department could issue summons during smuggling-related inquiries. The court cited relevant legal provisions to support the Customs Officer's authority to summon individuals for investigations related to smuggling activities. The court concluded that the summons issued under Section 108 could not be deemed jurisdictionally improper, given the broad investigative powers granted to Customs Officers.

In conclusion, the court dismissed the writ petition, directing the respondents to issue fresh summons clearly outlining the documents required from the petitioner. The court emphasized that the investigating authority had the discretion to carry out the investigation within its jurisdiction, and it was not within the court's purview to direct a transfer based on the factual circumstances.