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TMI Blog2015 (10) TMI 1307X X X X Extracts X X X X X X X X Extracts X X X X ..... d in favour of the assessee. - Special Civil Application No. 8704 of 2015 - - - Dated:- 1-10-2015 - Harsha Devani And A. G. Uraizee, JJ. For the Petitioner : Mr. Jaimin R Dave, Advocate, Mr. Rohan H Mathew, Advocate For the Respondent : Mr. Hriday Buch, Advocate JUDGMENT ( Per : Honourable Ms. Justice Harsha Devani ) 1. Rule. Mr. Hriday Buch, learned senior standing counsel waives service of notice of rule on behalf of the respondents. 2. Having regard to the controversy involved in the present case which lies in a very narrow compass, the matter was taken up for final hearing. 3. The petitioner, a partnership firm is engaged in providing services of industrial and civil work to various clients and is reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 83,00,000/- during the course of investigation. 5. Subsequently, to the utter shock and surprise of the petitioner, on or about 06.04.2015, the first respondent issued notices under section 87 of the Finance Act, 1994 (hereinafter referred to as the Act ) to the debtors of the petitioner, with a direction that monies payable by the clients of the petitioner, instead of being paid to the petitioner, be deposited in the treasury of the Central Government. Thereafter, on 17.04.2015 (i.e. after issuance of the garnishee orders), the petitioner was served with a show cause notice. 6. Having regard to the fact that the notice under section 87 of the Act was issued unilaterally treating an amount of ₹ 4,25,74,611/- leviable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner, is a drastic, highhanded and arbitrary measure which could be resorted to only in exceptional and extraordinary circumstances. In the facts and circumstances of the case, when no demand has been raised from the petitioner, there was no warrant for resorting to such a drastic measure. Mr. Dave, learned advocate, however, submitted that over and above the amount already deposited, the petitioner is ready and willing to deposit an additional amount of ₹ 22,00,000/- within a period of six to eight weeks from today. It was, accordingly, urged that under the circumstances, the impugned notices under section 87 of the Act issued to the clients of the petitioner be quashed and set aside. 7.1 In support of his submissions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on behalf of the respondents. 9. This court has considered the submissions advanced by the learned counsel for the respective parties and has perused the record and proceedings of the case. 10. From the facts noted hereinabove, it is evident that the proceedings initiated against the petitioner, post the search operations, are still at the stage of show cause notice. Therefore, there is no final adjudication in respect of the service tax liability of the petitioner. The respondents, however, have unilaterally worked out such liability for the period in question at ₹ 4,25,74,611/-. Thereafter, no demand for such amount has been made from the petitioner by issuing any demand notice in this regard. However, the respondents have r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s adjudicated to be due to the Central Government. Under the circumstances, at the stage of show cause notice when the liability of the petitioner is yet to be crystallized, it was not permissible for the respondents to resort to the drastic provisions of section 87 of the Act. 12. Besides, as the facts reveal, no demand notice in respect of the aforesaid amount had been issued to the petitioner and directly garnishee orders had been issued to the clients of the petitioner. Such course of action adopted by the respondents, evidently, would bring the petitioner to disrepute and spoil its reputation in the business. Therefore, the action of the respondents of resorting to the provisions of section 87 of the Act was not warranted in the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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