2022 (2) TMI 1222 - HC - Service Tax

Validity of SCN - Jurisdiction - HELD THAT - There is an interim order in the matter passed on November 29 2016 staying the impugned show-cause notice initially for four weeks and was extended from time to time. Considering the submission of the parties and in view of the fact that this is a revenue matter which has been hanging for more than five years and no proceeding could be progressed after the issuance of impugned show-cause notice which the petitioners should have responded by filing the reply/representation/objection to the impugned show-cause notice the issuance of notice by an authority cannot be treated as a final decision or conclusion of the matter by that authority and cannot be automatic presumption that at the final decision on the impugned show-cause notice authority will go against the petitioners. At the time of hearing petitioners shall be entitled to take all the points raised by them in this writ petition as well as in the short written notes of argument and the respondent/authority concerned shall deal with the same while taking a final decision on the aforesaid impugned show-cause notice within four weeks from the date of making such representation/objection and shall communicate his decision to the petitioners within two weeks thereafter. Petition disposed off.

Summary

Issues:
Challenge to show-cause notice jurisdiction, Prematurity of writ petition, Direction to file objection/representation, Consideration and disposal of objection/representation, Continuation of interim order

Analysis:
The petitioners in this case challenged an impugned show-cause-cum-demand notice issued by the Commissioner, Central Excise & Service Tax, Audit-II Commissionerate, Kolkata, on the grounds of jurisdiction and raised various challenges against the notice. Both parties filed affidavits and written notes of argument. An interim order was passed staying the show-cause notice, which was extended multiple times. The court noted that the issuance of a notice does not signify a final decision by the authority, and it cannot be presumed that the authority will rule against the petitioners. The court deemed the writ petition premature but directed the petitioners to file objections or representations to the show-cause notice within four weeks. The authority was instructed to consider and dispose of the objections in accordance with the law, providing an opportunity for a hearing. The petitioners were allowed to raise all points during the hearing, and the authority was required to communicate its decision within two weeks after the objection filing deadline. The interim order, previously granted to the petitioners, would continue until one week after the objection's disposal, subject to the final decision by the authority.

This judgment addresses the challenges to the jurisdiction of a show-cause notice, emphasizing the need for the petitioners to respond appropriately and the authority to consider objections fairly. The court highlighted the importance of due process and reasoned decision-making in revenue matters, ensuring that all legal consequences follow the final outcome. The judge acknowledged the prolonged nature of the case and the necessity for progress, urging the parties to engage constructively in the process. The directive to file objections within a specified timeframe and the continuation of the interim order demonstrate the court's commitment to a just and orderly resolution of the dispute. The judgment underscores the significance of procedural compliance and the authority's obligation to provide a reasoned response, safeguarding the petitioners' rights throughout the proceedings.