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TMI BlogREPLY TO SHOW CAUSE NOTICEX X X X Extracts X X X X X X X X Extracts X X X X ..... REPLY TO SHOW CAUSE NOTICE - By: - Mr. M. GOVINDARAJAN - Service Tax - Dated:- 26-5-2016 - - We have seen in the previous articles that the tax/duty cannot be recovered without issuing a show cause notice and the assessee is given a reasonable opportunity of being heard. The show cause notice itself requires submitting the reply, if any, of the assessee before the concerned officer for his consideration with relevant copies of documents to substantiate his arguments. The show cause notice itself gives the time within which the reply shall be submitted. We have also seen that the show cause notice issued can be challenged if the same has been issued without jurisdiction and for that purpose the assessee is required to approach High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by means of a writ petition. The reply given to the show cause notice is inevitable. This has been seen true if the following judgments are gone through: In Travel Club Forex P Limited V. Commissioner of Central Excise, Hyderabad 2010 (4) TMI 441 - CESTAT, BANGALORE the Tribunal found that the record that the appellant had not replied to the show cause notice nor attended the hearings before the Adjudicating Authority and were claiming before the Commissioner (Appeals) that they were not given the relied upon documents. The Tribunal deprecated the attitude of the appellant, at the same time since the appellant should be given a chance to defend the case properly before the Adjudicating Authority. In view of this without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expressing any opinion on the merits of the case, the Tribunal set aside the impugned order and remand the Adjudicating Authority made available the documents that may be sought by the appellant and the appellants are directed to file the reply to the show cause notice within four weeks from the receipt of this order and thereafter the Adjudicating Authority may decide the matter within 3 months after following the principles of Natural Justice. In Teddy Exports V. Joint Commissioner of Central Excise, Madurai 2010 (11) TMI 237 - MADRAS HIGH COURT admittedly what is under challenge is only a show cause notice, calling upon the petitioner to show cause as to why the service tax should not be levied against him. But the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner has not chosen to give any reply to the said show cause notice, instead rushed to this court with this writ petition. In the opinion of the Court when alternative remedy is available, which is efficacious the Writ Petition cannot be entertained at all . The petitioner can very well submit his explanation and if any adverse order is passed he can very well work out his remedy in the manner known to law. In respect of the question as to whether service tax is leviable, it is for the respondent to consider as to how and why the service rendered outside, but received in India is also liable for tax. If any such plea is raised in the explanation, the respondent shall consider the same strictly in accordance with the law. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Noble Institute (Education) Private Limited V. Union of India 2006 (3) TMI 754 - GUJARAT HIGH COURT the question involved in the petition is whether service tax is to be paid on the amount recovered by an assessee before 01.07.03 i.e., the date on which the service tax was made leviable under the provisions of Sec. 66 of the Finance Act, 1994 . It is not in dispute that the amount which is to be made taxable by the respondent authorities was received by the petitioner before 01.07.2003. It appears to be the case of the respondents authorities that because of the circular dated 05.11.2003 the authorities believed that service would have to be paid even if the amount is received by the assessee before 01.07.2003 because the servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in respect of the amount so received are rendered after 01.07.2003. The Court did not go into the question of law involved in the petition because the petitioner has approached the court only at the stage when a demand note has been issued and still there is no adjudication by the respondent authorities. Looking to the facts of the case, the High Court directed that the petitioner shall give reply to the demand notice dated 29.06.2005 and show cause notice dated 23.11.2005 which has been issued during the pendency of this petition and the concerned authority shall finally adjudicate the case. In Royal Ocean Agency Private Limited V. Union of India 2009 (5) TMI 519 - CALCUTTA HIGH COURT it was held that it is the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of fact, which cannot be gone into in the writ jurisdiction. Therefore as the show cause notice has been issued the petitioner is at liberty to file reply to the same. If such reply is filed the Commissioner of Service Tax, Kolkata shall dispose of the same by passing a reasoned order afresh to be communicated to the parties giving an opportunity of hearing to the petitioner. In Paramount Impex Private Limited V. Union of India 2009 (10) TMI 98 - PUNJAB HARYANA HIGH COURT the High Court found that the writ petition could not be entertained at this stage because merely a show cause notice had been challenged and especially when the remedy of filing reply to the show cause notice before the authorities concerned has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t yet been availed. It cannot be presumed that the authorities under the Act would not consider the issues before the High Court. Therefore the petitioner is relegated to the remedy of show cause notice by filing reply. In Mukesh Associates V. Commissioner of Central Excise, Salem 2008 (4) TMI 66 - CESTAT, CHENNAI In adjudication of a show cause notice the Commissioner in the impugned order, demanded the tax from the appellants by including certain expenses held to have been incurred by the party in relation to the above service. No reply to the show cause notice was filed before the Adjudicating Authority. On the first occasion the party requested for adjournment and the same was granted. This repeated on the secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d occasion also. On the third occasion the appellant requested for supply of copies of the department. They also sought further time for filing reply to show cause notice as also for being heard. It was informed that the documents asked for by them were not possession of the department and these documents were not relied on the show cause notice. The appellants, the Tribunal held, do not deny this. The Tribunal further held that for whatever reason, no reply to show cause notice having been filed in the case, the party s request for a last opportunity to submit reply to show cause notice is a part of opportunity of being heard vis- -vis the allegations raised in the show cause notice. The Tribunal did not think that Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has done substantial justice to the party by not granting them the opportunity, which could have been granted in terms of Sec. 33A of the Central Excise Act as made applicable to the service tax matters. After all it is trite law that procedure is only a handmaid to justice. In Prakash Industries Limited V. Commissioner of Central Excise, Raipur 2009 (8) TMI 817 - CESTAT, NEW DELHI the denial of the contents of the show cause notice cannot be said that the same would amount a reply to the show cause notice. It was not a detailed reply and that it was filed only to avoid ex-parte proceedings against the appellants. The appellants are themselves to be blamed for the delay in the matter. It is true that there is a voluminou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s record, however, merely because there is voluminous record it cannot justify unreasonably long period to prepare the reply. Undoubtedly the documents are in relation to the activities of the appellants themselves. Being so, all the materials are within their knowledge and therefore there is no justification to give undue long period to the appellants in this regard. In the facts and circumstances of the case, not to have a second round of litigation in the matter, the Tribunal permitted the appellants to file further detailed reply, if they so desire, and thereafter the adjudicating authority to proceed with the matter. In Ashok R. Mistry V. Commissioner of Customs (ACC Import), Mumbai 2010 (10) TMI 425 - CESTAT, MUMBAI t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he show cause notice was received by the appellant in the middle of 2007. The order-in-original was passed on 15.10.2008. There is no valid explanation as to why any reply could not be filed by the appellant upon receipt of the show cause notice, during the long spell between the two dates. The plea of negation of natural justice raised by the appellant is also too feeble to be considered for the present purpose. In Erode Ranga Textiles Processors (P) Limited V. Commissioner of Central Excise, Salem 2006 (6) TMI 272 - CESTAT, CHENNAI the Tribunal found that despite numerous opportunities were given the appellants did not reply to the show cause notice. Their case is that before replying to the notice it is necessary to cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss examine all persons who deposed against them under Sec. 14 of the Central Excise Act. The appellant contended that there is an element of breach of natural justice in the denial of opportunity for cross examining the said witnesses. The Tribunal did not accept this argument. The Department issued a show cause notice after framing a case of clandestine removal of goods against them. It is also furnished to the notice all the evidentiary materials relied upon by it. Thereupon it was open to the noticee to reply to the notice admitting or denying the allegations raised in the notice. Where there was no reply denying such allegations, there was no dispute to be adjudicated upon. A dispute arises when facts alleged by one pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty are denied by the other. In the present case, when any dispute was yet to arise, the adjudicating authority allowed the appellant to cross examine persons who gave incriminating statements against them. In the absence of reply to show cause notice, the Adjudicating Authority should not have allowed the cross examination of any person as witness . The persons (named in the show cause notice) who gave statements against the appellants are, as of now, witnesses for the department as their statements support the allegations leveled against the appellants. Before seeking to cross examine them, the appellant must first deny the allegations through a reply to the notice. In this article the steps to be taken in giving reply to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice are discussed. If a show cause notice is served on the assessee, the same may be received by the assessee; Don t avoid receipt of show cause notice; non receipt is sometimes considered as a service and there is the possibility of deciding the case ex-parte without hearing the assessee; The date of receipt of show cause notice is to be marked on the front page; The time given to the show cause notice is to be noted and act accordingly; Analyze whether the show cause notice is conformity with the provisions of law including jurisdiction, authority etc., If the show cause notice is issued without jurisdiction the same can be challenged before the High Court; The show cause notice may be analyzed as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the allegations contained in the show cause notice, the quantum of tax, interest, penalty etc., If the assessee fees that the service tax is payable by him it would be advisable to pay the service tax and inform the same to the department; If any document is required from the department request may be made to the department asking for the documents; If the reply to the show cause notice is not able to be given in the prescribed time extension of time may be sought before the authority in writing; If no reply is received from the department, it may be taken as granted that the extension of time has been granted. There is no proper form for giving reply to the show cause notice; The preliminary objections such as jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, invoking extended period of limitation may be first raised in the reply to the show cause notice with justifications; The assessee is try to provide reply or explanation to all points covered in the show cause notice; Wherever required the assessee is required to substantiate the reply with documentary evidence; The case laws favorable to the assessee may also be quoted and the copies of case laws may also be attached with the reply; In the reply it should invariably be noted that the assessee wants to be heard in person; otherwise the assessee will not be called for personal hearing; The reply may be in the book format giving index in the first page giving the details of reply, documents, case laws etc., The reply may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be submitted in person before the authority and get acknowledgement from them or may be sent by registered post/speed post; If it is sent by registered post/speed post it is better to take the delivery report by tracking the same in the post office web site; The reply submitted before the authority may be modified at any stage but before personal hearing; If it is a complex case, then the assistance of the professionals such as Advocate, Practicing Cost Accountant, Practicing Company Secretary or Practicing Chartered Accountant may be taken in giving reply to the show cause notice and also for appearing before the authority concerned. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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