9911796707
TMI Blog2017 (7) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... s Limited (SECL) requesting the SECL authorities to freeze the amount payable to the petitioner-establishment. Similarly, the challenge is also to Annexure P-2, dated 16-12-2016, which is a similar letter issued to the Union Bank of India, i.e., one of the Bankers of the petitioner-establishment. Annexure P-3, dated 21-10-2016, is a show cause notice which is also under challenge. 2. On the basis of the discussions referred to in the show cause notice (Annexure P-3) it was assumed that the Petitioners have failed to correctly assess and pay service tax within stipulated period and that they have also failed to submit ST-3 return and have also failed to show the correct taxable amount in ST-3 return for the period 2011-12 to 2015-16. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y not be maintainable and the same deserves to be rejected in the light of the judgment passed by this Court in the case of M/s. Sarda Energy & Minerals Ltd. v. Union of India & Another, decided on 28-6-2017 in Writ Petition (T) No. 73 of 2017. 5. Per contra, Learned Counsel for the Petitioners submits that the letters (Annexures P-1 and P-2) also reflect that they have been issued invoking the powers conferred upon the authorities under Section 87 of the Act. Proceedings under Section 87 could have been initiated only on determination being done under sub-section (2) of Section 73. In the instant case, there does not appear to be any such proceeding drawn or determination made and thus prayed for the quashment of the same. 6. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds, resort to Section 87 of the Finance Act, 1994 can be had for recovering the amounts determined to be due from the service provider and not prior to that..." 7. Likewise, the Gujarat High Court in the matter of Gopala Builders v. Directorate General of Central Excise Intelligence, decided on 1-10-2015 in Special Civil Application No. 8704 of 2015 [2015 (40) S.T.R. 888 (Guj.)], in paragraph 10, 11 & 12, has held as follows : "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, howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the amount due and payable by the assessee. 11. This Court is in agreement with the aforesaid view expressed by the Uttarakhand High Court, namely, that recovery under Section 87 of the Finance Act can be resorted to only after an amount is 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply nor from the submissions made by the Respondents, do we find any demand notice being raised against the Petitioners at any point of time and it is only the garnishee notices and a freezing order straightaway issued, Annexure P-1 to the management of SECL and Annexure P-2 to the Union Bank of India. 10. For the foregoing reasons, this Court has no hesitation in reaching to the conclusion that the garnishee notices issued to the SECL and Union Bank of India were totally uncalled for and the authorities ought not to have issued such notices before a final determination is done. Thus, Annexures P-1 and P-2 at this juncture deserve to be and are set aside/quashed. Since the Petitioners submit that to the show cause notice, dated 21- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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