TMI Blog2015 (12) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... us, the settled principle that levy, assessment and valuation alone will enable the Revenue to recover the amount of taxes and recovery cannot precede prior important steps. Merely because there is incidence and charge of tax will not be of assistance as the charging section and machinery provisions all enable together, the Revenue to assess the tax. Unless and until in case before us there is a crystallization of a demand by proper adjudication order and on hearing the Petitioner, there was no question of any recovery. Even if the letters have been addressed to the bank and there has been a freezing of the account, yet, we find that till date there is no adjudication order passed. The show cause notice has been issued more than a year back. In the circumstances, allowing the Petitioner's account to be frozen would not be in accordance with law. - if there is a requirement of an adjudication and assessment of the tax and that is how the liability has to be ascertained then, we do not find any substance in the contentions raised before us on behalf of the Revenue. The Division Bench in paragraph 45 also relied upon the order passed in the case of Lawson Tours and Travels(2015 (7) TM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and documents. On extensive investigation and on recording of the statement of the Petitioner, a show cause cum demand notice dated 15th October, 2014 demanding the service tax in the sum of ₹ 2,49,63,812/- came to be issued and served on the Petitioner. The allegation is that the Petitioner has not discharged its liability to pay service tax in full and that is why the demand ought to be raised and the amount of service tax recovered from him. 6. A reply was given to this show cause notice on 17th July, 2015 denying all the allegations and asserting that the service tax due and payable in law has been paid. The Petitioner requested for a personal hearing. 7. The Additional Director, however, has not placed the matter for a personal hearing nor has he passed any order on the show cause notice. However, the allegation in the Petition and throughout is that instead of any adjudication in relation to the demand and pursuant to the show cause notice, the banks have been intimated to freeze the accounts. Thus, the recovery proceedings have been initiated without any adjudication order being passed. Once the Petitioner came to know that the notices have been issued under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a communication dated 30th October, 2014 addressed to the Federal Bank states that investigations conducted reveal that the Petitioner service provider has provided the services of work contract. In addition to the consideration towards services the amount of service tax has been charged and duly recovered. If the service recipients have paid that tax to the Petitioner and the Petitioner has failed to remit this admitted sum to the Government, then, the notices under Section 87 can be issued and that is how Mr Jetly would justify the impugned action. 10. He would therefore submit that this is not a fit case for interference in writ jurisdiction and equally the judgments relied upon do not have any application to the peculiar facts and circumstances of this case. 11. With the assistance of both counsel, we have perused the Petition and its Annexures. 12. It is common ground that AnnexureA is a copy of the show cause notice dated 15th October, 2014. It is addressed to the very Petitioner before us. It refers to the collection of service tax allegedly by the Petitioner and it is not remittance to the Government. This was revealed during the search carried out. This was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue means ascertained liability for taxes and unascertained and unassessed tax which is not legally binding on the assessee cannot be recovered by the mode found to be applicable in that case. The word 'due' has been interpreted to mean something which is payable and recoverable. The Hon'ble Supreme Court held that it does not refer merely to a liability created by the charging sections to pay the tax under the relevant law. It refers to an ascertained liability for payment of tax quantified in accordance with law. In other words, the taxes as assessed which are presently payable by the notified person are taxes which have been taken into account. It is in that context and carrying this principle further that the Division Bench of this Court applied it to recovery under Section 87 of the Finance Act, 1994. The reliance placed on the judgment of ICICI Bank(supra) is thus, apposite. The Division Bench has applied this very principle and though Mr Jetly would submit that on facts this judgment is distinguishable, we do not find any substance in that contention. Even in the case of ICICI Bank(supra), it was claimed that a taxable service was provided and that a communication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39 and 40. Thus, if there is a requirement of an adjudication and assessment of the tax and that is how the liability has to be ascertained then, we do not find any substance in the contentions raised before us on behalf of the Revenue. The Division Bench in paragraph 45 also relied upon the order passed in the case of Lawson Tours and Travels(supra). We, therefore, do not find any reason to sustain the impugned action. We quash and set aside the impugned notices at Annexure-E to the petition on the short ground that these are nothing but recovery measures initiated to recover the amount due as service tax which has not been determined and crystallized pursuant to any adjudication order. Therefore,while quashing these notices, we clarify that we have not expressed any opinion on the rival contentions insofar as the demand is concerned. We have also not held that the Petitioner is liable to pay service tax and on account of some part payment or admission of alleged liability to tax. All pleas in that regard of all sides are kept open. We also clarify that in pursuance of any valid and binding adjudication order the Revenue can initiate all recovery measures including under Section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
