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2013 (4) TMI 21 - HC - Service TaxShow cause notice challenged - violation of principle of natural justice - Opportunity of being heard - as per assessee the authority concerned has already made up mind and this notice has been issued only to project that opportunity of hearing is sought to be given to the petitioner before passing the same order for which decision has been taken by the authority and it has been communicated in the show cause notice itself - Held that:- From the entire notice, it appears that the authority issuing notice appears to have tried to convince himself more, instead of putting questions to the assessee. The dispute is only with respect to interpretation of two contracts entered into between the parties – petitioner on one side and other two parties- Aravali Power Company Private Limited and Damodar Valley Corporation on the other. They may be composite and inextricable related contract forming one transaction or may not be. Those contracts may be turnkey project contract or may not be. The evidence may justify forming either of the opinion, for which a party, if wants to take a decision fairly, then he is supposed to give not only an opportunity of hearing to other party but also is required to show that the action of even initiation of proceedings is fair and without any predetermination of mind. The paragraphs running in several pages of SCN created an impression that one of the highest officers has been targeted, who himself in the earlier occasion made it clear to the Department that the person who is the competent officer and who is in know of the fact has already deposed before the authority. The purpose can be served by showing that the reasons indicated in the notice are only to make the assessee aware of the facts and the legal issues which he is required to answer. It is very unfortunate that the respondent-Department’s Officer-in-charge in reply affidavit went to the extent of stating that the contracts have been entered into by the petitioners not under free and genuine consent and have been entered into (due to or under) pressure/undue influence of the customers. It appears that the respondents, on facts, on point of law, on the basis of conduct of the company, on the basis of the conduct of its officers and on the interpretation of the contract, tried to say that the stand which has been taken by the petitioner before the Commissioner, who issued the notice, is absolutely wrong on fact and in law and bona fidely. Such notice cannot be treated to be a notice to show cause in any manner. It is only a consequence of predetermined mind of the Officers issuing the notice and is fortified more seriously by the counter affidavit filed by the Officerin- charge of the respondents. As decided in Oryx Fisheries Private Limited fully [2010 (10) TMI 660 - SUPREME COURT OF INDIA] if on a reasonable reading of a show cause notice a person of ordinary prudence gets the feeling that his reply to the show cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show cause notice does not commence a fair procedure especially when it is issued in a quasi-judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence. In this case, the authority failed to keep an open mind and has shown his closed mind to the petitioner and it is a clear case where the “principle of natural justice must not only be done but it must eminently appear to be done” has been violated. Hon’ble Supreme Court in the case of Siemens Ltd. [2006 (12) TMI 203 - SUPREME COURT OF INDIA] stated Ordinarily writ court may not exercise discretion in entertaining the writ petition questioning the notice of show cause , in certain circumstance, writ petition can be entertained and one of the situations may be of premeditation and the writ petition is maintainable - Show cause notice set aside. However, since the show cause notice is set aside based on the above grounds, permission granted to the authority to issue a fresh show cause notice to the petitioner.
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