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TMI Blog2013 (2) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be made within the 6th day of that month, that is one day later. Limitation would thus start running from the seventh day of the month following the calendar month in which payment for the taxable service had been received by the petitioner. - The onus is on the authority issuing the show cause to disclose relevant facts in the show cause notice or documents annexed therewith to show that the show cause notice was within one year from the relevant date, or in case of invocation of the proviso to Section 73(1) of the Finance Act, within five years from the relevant date. Even when the extended period of limitation is invoked in terms of the proviso to Section 73(1) of the Finance Act, sufficient particulars of the alleged fraud, collusion or wilful misstatement would have to be given in the show cause notice to enable the assessee to give a meaningful and effective reply thereto. Similarly, for the same reason particulars have to be given of the facts allegedly suppressed. - The show cause notice is the foundation on which the document has to build up its case. The allegations in the show cause notice thus have to be specific. If the allegations in the show cause notice are va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation. - Decided in favour of assessee. - W.P. No. 1029 of 2010 - - - Dated:- 12-2-2013 - Indira Banerjee, J. Shri J.K. Mittal, Amitava Mitra Ms. Dolon Das Gupta, Advocates, for the Petitioner. Shri Rajarshi Bharadwaj Subir Kumar Saha, Advocates, for the Respondent. JUDGMENT This writ petition has been filed inter alia challenging a show cause notice bearing DGCEI F. No. 152/KZU/KOL/ST/Gr.F/06-2207, dated 23rd April, 2010 issued to the petitioner, raising Service Tax demand of ₹ 27,09,293/- on the petitioner for the period from 1st April, 2004 to 9th September, 2004 along with penalty under Sections 76, 77 and 78 of Chapter V of the Finance Act, 1994 and interest under Section 75 of Chapter V of the said Act. 2. The breakup of the aforesaid claim of ₹ 27,09,293/- is as follows :- (i) ₹ 4,71,526/- (as detailed in calculation-sheet enclosed as Annexure C to the impugned notice) in respect of services rendered between April, 2004 to August, 2004. (ii) ₹ 21,35,766/- (as detailed in the calculation-sheet enclosed as Annexure C2 to the impugned notice) in respect of services rendered between 1st April, 2004 to 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x (Audit) the petitioner categorically denied having rendered cargo handling services which include loading, unloading, packing and unpacking. The petitioner denied having rendered service of packing or unpacking. 8. Service Tax is payable under the Finance Act, 1994 as amended from time-to-time. After Service Tax was first introduced in 1994, amendments have from time to time been made and different kinds of services have been brought under the net of Service Tax. The Finance Act, 1994 has last been amended by the Finance Act, 2012. 9. Section 73(1) of the Finance Act, 1994 as it stood at the time of issuance of the impugned notice provided as follows : 73. (1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice : Provided that where any service tax has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... piry of the period of limitation prescribed under Section 73(1). A show cause notice would necessarily have to be issued within one year from the relevant date. Only in case of fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of Chapter V or any Rules made thereunder with intent to evade payment of service tax, a show cause notice might have been issued within five years from the relevant date. 15. The condition precedent for exercise of jurisdiction to issue a show cause notice after expiry of one year, but before expiry of five years, is the finding of fraud, collusion, wilful misstatement, suppression of facts or contravention of any provisions of Chapter V or of the Rules made thereunder, with intent to evade payment of service tax, by the person chargeable with service tax or his agent. 16. In no circumstances could jurisdiction to issue a show cause notice be exercised after expiry of five years from the relevant date. The entire demand in the impugned show cause notice is ex facie barred by limitation as five years had elapsed from the relevant date, as pointed out by Mr. J.K. Mittal appearing on behalf of the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her alleged that many other such instances were found during examination, but no particulars have been disclosed in the affidavit-in-opposition. 25. In the show cause notice it is alleged that examination of the entries in the Ledger as available in the seized CD, revealed numerous entries showing particulars of the Bills raised on various parties like M/s. Maharashtra State Electricity Board, M/s. Rajasthan Rajya Vidyut Utpadan Nigam Ltd., etc. on various dates. The Bill No. STPS/SECL/KORBA/04-05/07/16, dated 13-9-2004 was found to have been raised on M/s. Rajasthan Rajya Vidyut Utpadan Nigam Ltd. in connection with services rendered in the month of July, 2004, but the payment was found to have been received on 28-10-2004 by Cheque No. 971421, dated 27-10-2004. Similarly examination of sample bills revealed that there were substantial gaps of time between the period during which the taxable services were rendered and the dates of receipt of payments against the bills. However only the figures of the bills were mentioned under the head, Income of the firm . It is alleged that, as most of the payments were received in the half year ending March, 2005, the last date of filing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istrar of Trade Marks reported in (1998) 8 SCC 1, the Supreme Court discussed its earlier judgments on the question of maintainability of a writ petition when there was an alternative remedy, and held that the High Court was not justified in dismissing the writ petition at the initial stage without examining the contention of the writ petitioner that the show cause notice was without jurisdiction. 33. In this case too, a challenge has been thrown to the jurisdiction of the concerned respondent to issue a show cause notice, after expiry of the period of limitation stipulated in the proviso to Section 73 of the Finance Act, 1994. 34. It is well established that the question of limitation is a question of jurisdiction in the sense that an authority has no jurisdiction to issue a show cause notice which is barred by limitation. In the State of Punjab v. Bhatinda District Cooperative Milk P. Union Ltd. reported in 2007 (217) E.L.T. 325 (S.C.) = (2007) 11 SCC 363, the Supreme Court held that the question of limitation being a jurisdictional question, a writ petition challenging the validity of a notice of revision of an order of assessment of sales tax, on the ground of the same be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from non-disclosure of material facts, cannot therefore be accepted. It is well settled however that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well settled, will issue appropriate orders or directions to prevent such consequences. The expression reason to believe postulates belief and the existence of reasons for that belief. The belief must be held in good faith : it cannot be merely a pretence. If it be asserted that the Income Tax Officer had reason to believe that income had been under-assessed by reason of failure to disclose fully and truly the facts material for assessment, the existence of the belief and the reasons for the belief, but not the sufficiency of the reasons, will be justiciable. The expression therefore predicates that the Income Tax Officer holds the belief induced by the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave to be restricted to demand for a period of one year preceding the date of the show cause notice or at best within a period of five years preceding the date of the show cause notice if extended period of limitation was invocable. In no circumstances could any show cause notice have been issued in respect of a demand which arose more than five years prior to the date of the show cause notice. This view finds support from the decision of the Supreme Court in Ilavia Enterprises v. CCE, Jaipur reported in 1997 (91) E.L.T. 26 (S.C.). 46. As held by the Supreme Court in CCE, Ahmedabad-I v. M. Square Chemical reported in 2008 (231) E.L.T. 194 (S.C.), five years is to be computed by back calculation from the date of the show cause notice. The show cause notice having been issued on 23rd April, 2010 there could be no question of inclusion of any claim for any period prior to 30th March, 2005. 47. Section 73(1) of the Finance Act, 1994 being substantially in pari materia with Section 11A(1) of the Central Excise Act, 1944 the judgments of the Supreme interpreting Section 11A(1) of the Central Excise Act, 1944 including Bajaj Auto (supra), operate as a binding precedent for interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2007 (213) E.L.T. 487 (S.C.). 54. It is well-established that the revenue cannot invoke the extended period of limitation where facts leading to the show cause notices were already known to the revenue as held by the Supreme Court in Commissioner of Central Excise, Baroda v. Sotex reported in 2007 (209) E.L.T. 9 (S.C.). It is also well-established that subsequent change of opinion with regard to the taxability of any service does not justify a show cause notice upon invocation of the extended period of limitation. Reference may in this context be made to the judgment of the Supreme Court in P B Pharmaceutical (P) Ltd. v. Collector of Central Excise reported in 2003 (153) E.L.T. 14 (S.C.). 55. Contravention simpliciter of the provisions of Chapter V of the Finance Act, 1994, as amended from time to time, does not in itself attract the proviso to Section 73(1) of the said Act. For invocation of the extended period of limitation, the contravention must be coupled with intent to evade payment of service tax. 56. A show cause notice issued upon invocation of the extended period of limitation as provided in the proviso to Section 73(1) on the ground of contravention of Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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