2021 (6) TMI 797 - HC - Service Tax

Validity of SCN - Jurisdictional error - reply to SCN not provided - petitioner would submit that in view of the notice suffering from jurisdictional error, any reply to the show cause notice would not serve any purpose - declared service or not - Capacity Charges - late payment fees - HELD THAT - This Court is unable to appreciate the argument for the reason that even the jurisdictional aspect can be canvassed before the Authority concerned and it is not necessary that such issue has to be dealt with by this Court directly. Whatever be the objections of the petitioner in regard to the maintainability of the show cause notice, nothing precludes the petitioner from agitating the same before the Authority - It is always open to the petitioner to convince the Authority as to the invalidity of the show cause notice issued by him and in case the Authority passes any final and adverse order and in such event, it is open to the petitioner to challenge the final order in a manner known to law. But it is certainly not open to the petitioner herein to challenge the show cause notice even on the ground of challenge to the very jurisdiction of the authority who issued the notice - This Court finds that number of grounds have been raised in respect of the challenge in the writ petition but this Court is not inclined to give any legal finding on the grounds raised in the writ petition for the present, as it is for the Authority to apply his mind to the legal objections raised on behalf of the petitioner. This Court is not inclined to entertain the writ petition and same is to be rejected as premature - Petition dismissed.

Summary

Issues involved:
Challenge to show cause notice under the Finance Act, 1994 seeking service tax on Capacity Charges and late payment fees.

Analysis:
The petitioner, engaged in operating a coal-powered thermal plant, challenged a show cause notice issued by respondents under the Finance Act, 1994. The notice sought service tax on Capacity Charges and late payment fees. The petitioner contended that the notice lacked jurisdiction as respondent No.2 was not a Central Excise Officer as per Section 73 of the Finance Act. Additionally, the notice was challenged for exceeding territorial jurisdiction and being issued without mandatory pre-consultation. The petitioner argued that the notice was against the law laid down by the Supreme Court.

Legal Standpoint:
The petitioner's senior counsel argued that the show cause notice was without jurisdiction, making any reply futile. However, the court disagreed, stating that jurisdictional issues could be raised before the relevant authority and did not necessarily require direct court intervention. The court emphasized that the petitioner could challenge the notice before the Authority and subsequently challenge any adverse final order through legal means. The court declined to give a legal finding on the grounds raised in the writ petition, asserting that it was for the Authority to consider the legal objections.

Decision:
The Court found multiple grounds raised in the writ petition but declined to provide legal findings, deeming the petition premature. Consequently, the writ petition was dismissed without costs, and the connected miscellaneous petition was closed. The Court emphasized that the petitioner could address objections before the Authority and challenge any adverse final order through appropriate legal channels.