2021 (3) TMI 290 - HC - Service Tax

Maintainability of petition - Validity of Show Cause Notice - Principles of natural justice - SCN issued by the department without providing audit report to the petitioner - petitioner alleges that there is nothing left with the authority to decide in the matter finally, as a bare reading of the SCN clearly shows that the Adjudicating Authority has already made up its mind and pre-determined the demand - HELD THAT - The writ petition filed by the petitioner deserves to be dismissed for the reasons; firstly the matter is at the stage of show cause notice and opportunity of filing reply and personal hearing is still available with the petitioner; secondly the petitioner, if aggrieved by the order of the Adjudicating Authority, has a statutory remedy of filing appeal before the Appellate Authority as provided under Section 85 of the Act; thirdly against the order of the Appellate Authority, the petitioner has a right to file second appeal before the Appellate Tribunal as provided under Section 86 of the Act. Petition dismissed.

Summary

Issues:
1. Challenge to show cause notice dated 25.09.2020
2. Validity of pre-show cause notice dated 3.9.20 & 4.9.20 and final Audit Report dated 09.10.2020
3. Availability of statutory remedies under Section 85 and Section 86 of the Finance Act, 1994

Analysis:
1. The petitioner challenged the show cause notice dated 25.09.2020, arguing that it was issued without providing the audit report, indicating a pre-determined demand by the Adjudicating Authority. Citing judgments like M/s. Siemens Ltd. Vs. State of Maharashtra & Ors. and Oryx Fisheries Pvt. Ltd. Vs. Union of India & Ors., the petitioner sought the quashing of the notice.

2. The respondent department contended that the matter was at the show cause notice stage, giving the petitioner the right to reply and a personal hearing. The respondent highlighted the availability of statutory remedies, including appeal under Section 85 of the Finance Act, 1994, and a second appeal under Section 86 before the Appellate Tribunal. Reference was made to the judgment in Union of India & Ors. Vs. Coastal Container Transporters Association & Ors. emphasizing the importance of exhausting statutory remedies before approaching the High Court.

3. The counsel for the petitioner relied on the judgment in Commissioner of Central Excise, Haldia Vs. Krishna Wax Private Limited, stressing that the excise law is a complete code, and it is essential to raise all objections before the authority issuing the show cause notice before seeking redress through existing legal provisions. The judgment in Malladi Drugs And Pharma Limited Vs. Union of India & Another further supported the notion that challenging a show cause notice prematurely through a writ petition is not appropriate.

In conclusion, the High Court dismissed the writ petition, emphasizing that the petitioner still had the opportunity to respond to the show cause notice and avail statutory remedies provided under the Finance Act, 1994. The court highlighted the importance of exhausting all available legal avenues before seeking intervention through a writ petition, in line with established legal principles and precedents cited during the proceedings.