TMI Blog2011 (11) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... of prohibition forbearing the Commercial Tax Officer (Intelligence), Secunderabad Division, Hyderabad, from proceeding further pursuant to the show-cause notice dated March 16, 2011, for the tax period 2010-11 (up to November, 2010) and also a writ of mandamus declaring that it is not liable to pay VAT on imports made by Lanco or any other customer from foreign countries and on installation charges for erection of lifts and to interdict the authorities from levying tax on such transactions. Pleadings being complete, the matters are amenable to disposal at the admission stage. It is the case of the petitioner-company that it is a 100 per cent subsidiary of the Schindler Group of Companies, a worldwide leading manufacturer of elevators and lift products. The head office of the Schindler Group of Companies is stated to be situated in Ebikon, Switzerland, with its operations spread over 1,000 branches and 42,000 employees. The petitioner-company offers supply, erection, installation and commissioning of lifts and elevators to its clients. It is a registered VAT dealer on the rolls of the Commercial Tax Officer, Musheerabad Circle, Hyderabad. During the relevant tax period, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show-cause notices to the petitioner-company proposing to levy tax on the turnover relating to installation and commissioning charges received by the petitioner-company for installation of lifts/elevators. He raised a preliminary objection as to the maintainability of the writ petitions on the ground that the matter was still at the stage of showing cause and that a writ petition would not lie against a show-cause notice unless the same was shown to be ex facie without jurisdiction. As such a ground was not made out in the present case in the light of the authorization dated March 9, 2011, the first respondent sought dismissal of the writ petitions on this short ground. The first respondent also made submissions on the merits of the proposed levy of tax, which are irrelevant for the purpose of deciding the cases on hand. Be it noted however that the first respondent made it clear that as no final decision had been taken as yet and only show-cause notices had been issued, a final decision would be taken only after considering the objections of the petitioner-company and after providing it an opportunity of personal hearing. In its reply affidavits filed in both the writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . ... ... Pertinent to note, the rule does not require the authorizing officer to record the reasons for such authorization. The authorization dated March 9, 2011, therefore does not suffer from any procedural violation rendering it invalid. Consequently, the impugned show-cause notices issued by the first respondent pursuant to such authorization do not suffer from lack of jurisdiction. The prayers of the petitioner-company in both the writ petitions in so far as it seeks writs of prohibition against the first respondent from proceeding further in the matter for want of jurisdiction must therefore fail. As regards the second ground of challenge that the first respondent mechanically issued the impugned show-cause notices without examining whether the necessary foundation had been established for even proposing assessment to VAT, this court cannot lose sight of the fact that the matter is still at the preliminary stage of enquiry and the petitionercompany is yet to respond to the show-cause notices impugned in these writ petitions. The observations of the Supreme Court in Special Director v. Mohd. Ghulam Ghouse [2004] 120 Comp C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 phase cabling and power in stores to be provided by customer and not in Schindler's scope. It is therefore for the petitioner-company to respond to the impugned show-cause notices and establish its case on the merits. As pointed out by the first respondent in his counters, the issue is yet to be decided and there is no reason to suspect that the first respondent would not give a fair hearing to the petitioner-company and decide the matter with an unbiased and open mind. Such exercise by the jurisdictional authority cannot be circumvented by the petitioner-company at this preliminary stage on mere apprehensions. This court would be chary of interfering in such matters when the statutory machinery is yet to process the case. The observations of this court in Flemingo (DFS) P. Ltd. v. Commissioner of Customs, Custom House, Port Area, Visakhapatnam [2011] 8 GSTR 516 (AP); [2011] 2 ALD 245, a judgment rendered by one of us (VVSR, J), are of guidance (page 524 in 8 GSTR): 10. Further, in tax matters, ordinarily the courts have declined to exercise writ jurisdiction. In C.A. Abraham v. Income-tax Officer [1961] 41 ITR 425 (SC); AIR 1961 SC 609, the appellant along with anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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