2019 (7) TMI 155 - HC - Service Tax

Short payment of service tax - validity of summons - the sole ground that is raised by Mr. Shahi to question the summons is that it is premeditated because it is preceded by a letter dated 08.04.2015 of the same authority imputing short deposit of service tax payable by the petitioner - HELD THAT - The submissions present at paragraphs 24 to 28 of the counter affidavit initially filed as well as in the pleadings present in the rejoinder to the supplementary affidavit, subsequently filed, in no manner indicates a pre-judgment to the issue in contest rather paragraph 27 of the counter affidavit very clearly explains that notice has been issued to the two contesting parties i.e. the petitioner and BSNL for producing their documents in support of their respective claims but the petitioner instead of responding to the summons and producing documents for vindicating its stand, has rushed to this Court. We are certainly not persuaded to interfere with the matter at this stage and would direct both the petitioner as well as BSNL to register their appearance before the Superintendent, Central Excise and Service Tax Division, Muaffarpur on or before 25th of June, 2019, whereafter he shall proceed to dispose of the matter in accordance with law after giving opportunity of hearing to the contesting parties. Petition disposed off.

Summary

Issues:

1. Dispute regarding liability for service tax between petitioner and BSNL.
2. Impugning of summons issued by the competent authority.
3. Allegation of premeditated summons by the petitioner.
4. Request for interference by the Court at the current stage.

Analysis:

1. The judgment addresses the dispute over the liability for service tax between the petitioner and BSNL. The petitioner, a contractor appointed by BSNL, claims to have discharged the service tax liability as per the agreement. However, BSNL contests this position and shifts the liability onto the petitioner. The summons issued by the competent authority, the respondent Superintendent of Central Excise and Service Tax Division, Muzaffarpur, is challenged by the petitioner through the writ petition. The Court notes the inter party dispute and directs both parties to appear before the Superintendent to resolve the matter.

2. The petitioner questions the validity of the summons issued by the competent authority. The Court observes that the summons was issued following an enquiry and a prima facie impression gathered by the competent authority. The Court declines to interfere at this stage and directs both the petitioner and BSNL to appear before the Superintendent to provide an opportunity for hearing and resolution of the matter in accordance with the law.

3. The petitioner alleges that the summons is premeditated, citing a previous letter from the same authority regarding short deposit of service tax. However, the Court finds that the counter affidavit filed by the respondents, Central Excise and Service Tax Department, does not indicate any pre-judgment on the issue. The Court emphasizes that the summons was issued to both contesting parties for producing documents to support their claims, and rushing to the Court without responding to the summons was not the appropriate course of action.

4. The Court, after hearing the arguments from both sides, decides not to interfere with the matter at the current stage. The Court directs both the petitioner and BSNL to appear before the Superintendent by a specified date and clarifies that any default in appearance may lead the Superintendent to dispose of the matter based on the available records. The writ petition is disposed of with these directions.