2024 (12) TMI 798 - HC - Service Tax

Maintainability of petition - availanbility of alternative remedy - Challenge to SCN cum demand notice - jurisdiction of respondent Commissioner to issue such notice in respect of a period beyond 5 years - no proper intimation regarding personal hearing was given - violation of principles of natural justice - HELD THAT - With respect, the parameters laid down in M/S GODREJ SARA LEE LTD. VERSUS THE EXCISE AND TAXATION OFFICERCUM- ASSESSING AUTHORITY ORS. 2023 (2) TMI 64 - SUPREME COURT which in turn were based on catena of judgments would govern the field and regulate the powers of the High Court under Article 226 of the Constitution of India. It is not the issue regarding maintainability but entertainability. When there is admittedly a statutory remedy, when the petitioner had not co-operated the Commissioner pursuant to the show cause notice and had not produced anything before him, it would be a rather spacious plea now to point out the defect in the show cause notice and take exception to the order. It is not that he had allowed the Commissioner to decide something on merits but the latter was compelled to do so for want of such cooperation more importantly, non production of all the requisite record / documents / accounts. Even if it is his stand that the show cause notice is not maintainable, even that aspect can be agitated before the tribunal in the statutory appeal. Tthe petition is dimissed with liberty to the petitioner, to resort to the statutory remedy of appeal to the tribunal.

Summary

Issues:
Challenge to show cause cum demand notice
Validity of impugned order
Jurisdiction of the Commissioner
Principles of natural justice
Maintainability of the petition
Cooperation of the petitioner
Statutory remedy of appeal

Analysis:

The petitioner, a partnership firm, sought to quash a show cause cum demand notice and an impugned order issued by Respondent No. 2. The petitioner argued that they were not liable for registration under section 69 of the Finance Act, 1994, due to the nature of their business involving transportation of goods. The show cause notice was based on information from the Income Tax Department regarding the petitioner's taxable services turnover for the year 2015-16. The petitioner contended that the notice was beyond the permissible period of 5 years under section 73 and lacked proof of fraud or collusion to extend the timeframe. The petitioner also claimed a violation of principles of natural justice citing the case law of M/s Godrej Sara Lee Limited Vs. The Excise and Taxation Officer-Cum-Assessing Authority and others; AIR 2023 S.C. 781.

The petitioner further argued that no proper intimation for a personal hearing was provided, and communication was sent to an email address obtained from the Income Tax Department. On the other hand, Respondents No. 2 and 3 contended that the petition was not maintainable due to the availability of a statutory remedy of appeal before the tribunal. They claimed that the Commissioner had considered all aspects and passed a reasoned order, emphasizing the petitioner's failure to attend the personal hearing and cooperate. Respondents argued that the petitioner's non-cooperation led to the necessity of the order, and the petitioner should have filed returns to avoid liability.

The court considered the submissions and held that the parameters set in the case law of M/s. Godrej Sara Lee Limited would govern the situation. The court emphasized that the petitioner's lack of cooperation and failure to produce necessary documents hindered the Commissioner's decision-making process. The court dismissed the petition, granting the petitioner the liberty to appeal to the tribunal, as there was a statutory remedy available. The court also mentioned that the time spent on the current legal proceedings would be taken into account by the tribunal.