2019 (9) TMI 584 - HC - Service Tax

Validity of Recovery certificate - Rectification of error - error on the face of record or not - Section 74 of the Finance Act, 1994 - HELD THAT - The petitioner failed to produce the relevant documents and to appear in the adjudication proceedings to make out a case and otherwise the Tribunal did not find mistake apparent on the face of record to rectify it. Rectification can be done when there is a defect apparent on the face of the record and to be rectified - there is no defect of nature which could have been rectified by entertaining the application under Section 74 of the Act of 1994. The application under Section 74 of the Act of 1994 is dismissed - petition dismissed.

Summary

Issues: Challenge to order dated 07.08.2019 and recovery certificate dated 20.03.2019 under Section 74 of the Finance Act, 1994.

Analysis:
The petitioner challenged the order dated 07.08.2019 passed by the Assistant Commissioner, Central Goods & Service Tax, Division-III, Lucknow, along with the recovery certificate dated 20.03.2019. The petitioner had previously filed writ petitions, with the last one disposed of on 02.07.2019, directing the respondents to consider the application submitted under Section 74 of the Finance Act, 1994. The impugned order dated 07.08.2019 was passed in compliance with this direction. The Authority found that the petitioner failed to disclose the value of taxable services provided and tax paid, did not submit necessary documents, and did not appear before the Adjudicating Authority. The application under Section 74 was dismissed based on these grounds. The petitioner argued that their firm was not liable for 100% service tax, despite submitting necessary documents, and requested a rectification of the order. They contended that the Assessing Authority failed to consider all relevant facts, misinterpreted notifications, and did not quantify the amount imposed. The petitioner sought a remittance of the matter to the competent authority for a fresh decision. However, the Court found no error apparent on the face of the record to warrant rectification under Section 74 of the Act of 1994.

The Authority, in its order dated 07.08.2019, detailed the discussion and findings regarding the rectification application under Section 74 of the Finance Act, 1994. It noted that the petitioner failed to submit desired documents during investigation and adjudication proceedings, evaded tax willfully, and challenged the Order-In-Original on merits. The Authority emphasized that rectification under Section 74 is limited to correcting apparent mistakes, not rewriting orders. It found the penalties imposed under various sections of the Finance Act, 1994 to be proper due to the petitioner's evasion and non-compliance. The petitioner's contention of submitting documents was refuted as no such evidence was found in the record. The Authority concluded that the Order-In-Original dated 20.03.2018 was legal, proper, and based on the materials on record. The dismissal of the application was based on the lack of a defect apparent on the face of the record necessitating rectification under Section 74.

The Court considered the arguments presented by both parties and reviewed the record. It noted that the petitioner had approached the Court on multiple occasions, with the last writ petition decided on 02.07.2019. The Court observed that the Authority had correctly applied the provisions of Section 74 of the Finance Act, 1994 in dismissing the application. It highlighted that rectification can only be made for defects apparent on the face of the record, which was not found in this case. The Court concluded that there was no reason to interfere with the Competent Authority's order dismissing the application under Section 74 of the Act of 1994. The writ petition was subsequently dismissed, allowing the petitioner to pursue other available remedies.