2015 (1) TMI 810 - HC - Service Tax

Validity of Show-cause Notice - Two show cause notices dated 21.4.2010 and 20.4.2011 were issued for the period April 2008 to March 2011 alleging that the assesee had provided Business Auxiliary Service and had failed to remit tax on amounts received for providing such service – Did the Tribunal fall into error in rejecting the Revenue’s appeal, holding that the Show Cause Notices in question were not in accordance with law - Held that:- Object and purpose of SCN is to inform the recipient of the allegations against him so that he can meet them effectively and is not prejudiced by manifestly vague notice which leaves him confused and unable to answer/reply. The assessee must be given a reasonable and real opportunity and made aware as to what he has to meet. But, the notice cannot be read as a legislative enactment which is to the point, precise and required to show exceptional lucidity. What is required to be seen is whether the allegations made have been conveyed and set forth, to enable the recipient/assessee to get an opportunity to defend himself against the charges. Notice should not suffer from obscurity and unintelligibility as to deny a fair and adequate chance to the recipient/assessee to get himself fully exonerated and avoid incidence of tax. What transpired after the notice was served, conduct of the parties thereafter, hearing given, are all factors that have to be examined to ascertain as to any prejudice was caused resulting in an arbitrary and unjust decision. Principle of prejudice resulting from vagueness and uncertainty has to be examined in pragmatic and a reasonable manner.

No substantial question of law arises for consideration in the present appeal. It is not possible to agree with the said submission. As noticed above, substantial question of law was framed on 4th April, 2014. Tribunal in the impugned order has held that the show cause notices itself were vague and in violation of the principles of natural justice, and has set aside the order-in-original, which was passed. The show cause notices, averment made therein and principle of prejudice caused was not considered in proper legal perspective. Tribunal has not disposed of the appeal filed by the respondent-assessee on merits in respect of the findings given by the Commissioner of Service Tax, holding that the activities were taxable under the head ‘Business Auxiliary Services’. - Matter remanded back - Decided in favour of Revenue.