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2017 (7) TMI 1378 - HC - Service TaxNon-payment of service tax - mining services - issuance of letter to the garnishee for recovery of the dues by collecting those money - allegation against the Petitioners is that they have not paid the service tax for quite some time including the year 2016-17 and therefore it has been necessitated for the department to issue a letter to the garnishee for recovery of the dues by collecting those money which the management of SECL was to pay to the Petitioners - HELD THAT:- Undisputedly, in the year 2016-17, there has been no proceeding drawn against the petitioner-firm by the Respondents for assessment of the default in payment of service tax. It is also not in dispute that no show cause notice also has been issued to the Petitioners for the default, if any, for the year 2016-17. The show cause notice which is being referred to by the Respondents in their reply, is for the assessment year 2011-12 to 2015-16. This, in the opinion of this Court, is not proper, legal or justified. The Finance Act clearly envisages certain provisions of law which deal with the taxable service for charging the service tax. Section 72 deals with the provision for best judgment assessment, which a person or an establishment which is liable to pay service tax is supposed to do. A perusal of these two Sections would clearly reflect that there has to be a proper legal proceeding drawn so far as default of payment in service tax is concerned and an order has to be passed against the concerned and only then can the recovery proceeding or freezing proceeding or the order of freezing could have been passed - In the instant case, since no proceeding has been drawn, no show cause notice has been issued, no determination has been done, the impugned order (Annexure P-1) asking the SECL to detain the amount payable to the petitioner-firm until the amount is paid, is not sustainable and the same is accordingly set aside/quashed. Petition allowed - decided in favor of petitioner.
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