2019 (9) TMI 1147 - HC - Service Tax

Jurisdiction of SCN - Power of Commissioner Service Tax-II Commissionerate, Kendriya Utpad Shulka Bhawan to hear SCN - whether the show cause notice dated 19th April, 2016 was without jurisdiction? HELD THAT - The stipulation in paragraph 4 of the said show cause notice that it could be adjudicated by the Commissioner Service Tax-II Commissionerate was in order - Therefore, the objection of the appellant as to jurisdiction has no substance at all in our opinion. The case needs to be adjudicated on merits. However, we find from the records that in the absence of an interim order, the Service Tax Audit Commissionerate, Kolkata has on 17th March, 2017 adjudicated upon the show cause by passing an order. The appellants did not participate in it, because of the pendency of the appeal. To do complete justice between the parties, we direct that the show cause notice is to be adjudicated on merits afresh. The adjudication made on 17th March, 2017 is set aside - Appeal disposed off.

Summary

Issues:
Jurisdiction of show cause notice dated 19th April, 2016.

Analysis:
The High Court of Calcutta heard an appeal from a judgement dismissing a writ application regarding a show cause notice. The main issue was the jurisdiction of the show cause notice dated 19th April, 2016. The appellant argued that the notice was issued without jurisdiction by the Principal Commissioner Service Tax Audit Commissionerate, Kolkata, and the adjudicating authority mentioned in the notice did not have the jurisdiction to hear the case. The notice demanded a substantial amount of service tax, interest, and penalty under various heads of charge.

The Court referred to relevant sections of the Finance Act, 1994, and the Central Excise Act, 1944, to determine the jurisdictional aspects. The Circular NO. 985/09/2014-CX dated 22.09.2014 was also considered, which outlined the procedure for issuing show cause notices and adjudication. The respondents argued that the show cause notice was issued in accordance with the circular by the "Executive Commissioner" and should be adjudicated by the Commissioner as specified in the notice. They contended that the objection raised by the appellant regarding jurisdiction was baseless.

The Court found that the objection raised by the appellant lacked substance and directed that the show cause notice be adjudicated on merits afresh. The previous adjudication made on 17th March, 2017, was set aside, and the Service Audit Commissionerate, Kolkata, was instructed to conduct a fresh adjudication on the same notice within three months, providing the appellant with an opportunity to be heard. The appeal was disposed of accordingly, modifying the impugned judgement and order of the learned single judge dated 6th March, 2017.