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2022 (8) TMI 10 - CALCUTTA HIGH COURTValidity of order quashing the show cause notice (SCN) by the writ court - Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded - Writ Court has allowed the writ petition and quashed the show cause notice not on the merit of the matter but on account of earlier order passed by the Learned Single Bench of this Court in a writ petition filed by the respondent in MCLEOD RUSSEL (INDIA) LTD., KOLKATA VERSUS UNION OF INDIA & ANR. [2014 (11) TMI 927 - CALCUTTA HIGH COURT] - HELD THAT:- The finding rendered by the learned Writ Court in the earlier writ petition in W.P. No.48 of 2014 dated 20th November, 2014 does not reflect the correct legal position as it was held that The department has the jurisdiction and obligation to determine whether the writ petitioner is receiving support services from the government. Therefore, before it could demand or even show cause under Section 73 of the Finance Act, 1995, for Service Tax, it was incumbent upon the department to make the determination whether the subject service could be classified as a support service and the writ petitioner exigible to service tax. If the department’s answer was in the affirmative, only then, a show cause notice and thereafter a demand for service tax could have been issued. Section 73 of the Finance Act, 1994 deals with recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded. Sub-Section (1) of Section 73 states that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Central Excise Officer may, within thirty–months from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amounts specified in the notice. The crucial words in the said provisions are “pay the amounts specified in the notice”. Therefore, at the very first instance when the show cause notice was issued, it was incumbent upon the Central Excise Officer to compute the amount, which is being demanded from the assessee giving the assessee an opportunity to submit its objections to the show cause notice. The order passed by the learned single Bench quashing the show cause notice is not tenable and accordingly, the appeal stands allowed - the writ petition is dismissed with a direction to the respondent/assessee to submit its reply to the show cause notice within three weeks from the date of receipt of a server copy of this judgment and order.
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