9911796707
TMI Blog2024 (7) TMI 1405X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to Section 73 (1) of the erstwhile Finance Act, invoking the extended period of limitation beyond the 30 months and once an inquiry is conducted, opportunity is given to file reply when adjudication is held the grounds whatever urged by the petitioner herein would have to be challenged by way of an appeal provided under the Act of 1994, rather than challenging the jurisdiction of the revenue for issuance of the show cause notice - As subsequently in the course of the show cause notice and the hearing, the opportunity was provided to the petitioner to substantiate the same by answering the requirement of not registering himself under the service tax registration and payment of service tax. The invocation of the writ jurisdiction under Article 226 of the Constitution of India whether could be entertained when there is an alternative efficacious remedy of appeal available under this statute. It is not in dispute, but in the present case, Section 85 of the Act, 1994 provides for appeal against any orders passed by the authorities. If at all the petitioner is aggrieved by the order of the authorities, he would have to approach the appellate authority rather than invoking the wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... representative on behalf of the petitioner appeared before the authorities, submitted the documents and took up the same contention that he was not liable for the service tax for the reasons as already mentioned hereinabove that he would fall under the category of negative list entry under section 66 of Finance Act, 1994. However, respondent No.2 came to the conclusion that on the income of Rs. 70,48,100/- earned by the petitioner would fall within the category of services and he would be liable for payment of service tax and accordingly issued show cause notice for the period of 2015-16 to be correct. 6. The adjudicating authority found that the show cause notice issued demanding a sum of tax of Rs. 10,21,975/- on the value of Rs. 70,48,100/- raised in the show cause notice for the year 2015-16 is correct and sustainable. In view of the extended period which is beyond the period of 30 months, respondent No.2 confirmed the demand of service tax to the tune of Rs.10,21,975/- and also imposed penalty of Rs. 10,000/- each under section 77 (1) (a) and section 77(2) of the Finance Act, 1974. It is this order of the respondent, the petitioner is aggrieved, which is passed under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: 3.2 Ingredients for extended period: Extended period can be invoked only when there are ingredients necessary to justify the demand for the extended period in a case leading to short payment or non-payment of tax. The onus of establishing that these ingredients are present in a given case is on revenue and these ingredients need to be clearly brought out in the Show Cause Notice alongwith evidence thereof. The active element of intent to evade duty by action or inaction needs to be present for invoking extended period. 11. He also relies on 3.6 of the circular where power to invoke extended period is conditional. It is vehement contention of learned counsel for the petitioner that the onus of establishing that these ingredients are present in a given case where it falls within the extended period is on the revenue and the ingredients needs to be clearly brought out in the show cause notice along with evidence thereof. The active element of intent to evade duty by inaction or inaction needs to be present for invoking the extended period. Hence, it is his contention that by invoking the extended period, the show cause notice does not specifically state or contain anywhere w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made. Hence, he seeks for quashing of the show cause notice and consequently to allow his petition. 16. Per contra learned counsel representing the revenue has filed his detailed statement of objections and he contends that apparently it is not disputed by the petitioner that he is in the contract service of drilling service with the government departments and other agencies. Though he has filed income tax returns, he is not registered with the service tax department and he has not paid the service tax which is not in dispute. 17. Learned counsel further contends that in view of non-payment of service tax, he was short listed for verification of the service tax liability by the revenue and accordingly, based on the ITR for the financial year 2015-16, show cause notice was issued to the petitioner for which he has replied and he was given a fair hearing, he was heard and adjudication was made. He has failed to explain the reasons with documentary evidence like bills, invoices, etc., for not getting and registering service tax registration and for non-payment of the service tax which is due to the revenue. Accordingly, after due process of law, invoking the proviso to Section 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustainable hence negatived. 20. To rebut this argument of the revenue, it is a vehement contention of learned counsel for the petitioner that in the show cause notice issued by the revenue, there is no specific plea or specific averment made as to for what reason and what purpose as contemplated under the proviso to section 73 (1) of the Act, the show cause notice is issued. Nothing specific is mentioned as contained in the proviso to 73 (1) for the petitioner to answer or rebut by way of rebuttal to the revenue, but however, the reply to the show cause notice is given by the petitioner. Admittedly, the show cause notice is issued under 73 (1) of the Finance Act to the petitioner and why the imposition of penalty for failure to take service tax registration and payment of tax should not be imposed on the petitioner. These are forthcoming at paragraph No.8 of the order passed by the authority vide Annexure-A. The reply is also reproduced at paragraph No.9 where the petitioner has stated that he was under the impression that service tax is exempted for agricultural sector. Hence, he has not obtained service tax number and has not paid any service tax and therefore, he would not be li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enging the jurisdiction of the revenue for issuance of the show cause notice. It cannot be said that the revenue does not have the jurisdiction to issue show cause notice under Section 73 (1) of the Act as it is not specified in detail with regard to the requirement under proviso to Section 73 (1) of the Act. As subsequently in the course of the show cause notice and the hearing, the opportunity was provided to the petitioner to substantiate the same by answering the requirement of not registering himself under the service tax registration and payment of service tax. 24. Learned counsel for the revenue has relied on the judgment of the Hon ble Apex Court in the case of State of Maharashtra and others vs. Greatship (India) Limited reported in AIR 2022 SC 4408 wherein the learned counsel for the revenue has relied on paragraph No.6 which reads as under: 6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal Under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proce ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
