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2016 (6) TMI 835 - BOMBAY HIGH COURT

2016 (6) TMI 835 - BOMBAY HIGH COURT - 2016 (42) S.T.R. 948 (Bom.) - Probability of arresting the Directors or employees of the petitioner - non payment of service tax - investigation are on - fear of coercive proceedings for recovery of the amount, styled as 'Service Tax', under the provisions of Finance Act, 1994, without following the mandate of Section 73 and/or 73A thereof - he Petitioners claim that they carry on a legitimate business activity by arranging for hotel accommodation for those .....

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ummons being issued and on called upon to attend the Officers of the Respondents, they will attend and co-operate in these investigations by producing all the documents and answering the requisite queries, subject, of-course, to their rights in law. It is only when these investigations conclude that the authorities would be in a position to take a decision whether to launch any prosecution. In such a prosecution as well, if the provisions of the Criminal Law, which enable arrest in cases of cogn .....

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traightway permissible and particularly in the given facts and circumstances of the case. - Once we also note the stand of the Respondents as not precipitating the matter particularly harming the life and liberty of those, who are in-charge of Petitioner No.1-Company, then, all the more, any detailed discussion by referring to the arguments in-depth, consideration of the case law becomes unnecessary. - The Writ Petition is disposed of. - WRIT PETITION NO.1088 OF 2016 - Dated:- 26-4-2016 .....

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covery of the amount, styled as 'Service Tax', under the provisions of Finance Act, 1994, without following the mandate of Section 73 and/or 73A thereof and arresting the Directors or employees of Petitioner No.1, including Petitioner Nos.2 and 3, under Section 91, read with Section 89(1)(ii) of the Finance Act, read with Section 83 thereof, and further read with Section 9AA of the Central Excise Act, 1944. 2. This Petition was placed before this Court earlier. Petitioner No.1 is a Compa .....

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cers of Respondent No.1, discharging the duties and exercising the jurisdiction under Chapter V of the Finance Act, 1994, Service Tax Rules, 1994 and Central Excise Act, 1944 and Rules framed thereunder. 3. The Petitioners claim that they carry on a legitimate business activity by arranging for hotel accommodation for those travelling and that is how they provide online air, rail, cab and hotel booking through a website www.cleartrip.com. Petitioner No.1-Company states that it allows its custome .....

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h they have obtained from the hoteliers. As far as the checking-in of the tourists and travellers is concerned, that is a matter between the hoteliers and them entirely. There is billing done, in which whatever services are rendered by hoteliers and resort owners, they are charged for, including the applicable service taxes. As far as the Petitioners are concerned, they have submitted such documents as would enable the authority to appreciate and understand their business activity, distinct from .....

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nd the Petitioners, being in the similar business, following identical process, Respondent No.2 coerced the Petitioners to deposit the service tax, which they have collected but failed to deposit on behalf of the hoteliers. 6. The Petitioners state that they provided clarification, but they apprehend that it would be the stand of the Respondents that they would not accept the version, nor follow any due process of law, in the event, this version or stand of the Petitioners found not acceptable. .....

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y show cause notice and without any adjudication, but on the assumption that the Petitioners had collected the amount representing service tax and not deposited the same with the Government Treasury, that these coercive measures, including arrest of the employees of the Petitioners and Petitioner Nos.2 and 3, would be effected. 8. Reliance is placed upon several provisions in the Service Tax Act and Finance Act, 1994 and the Rules framed thereunder, so also a compilation containing Judgments, wh .....

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davit-in-reply has been filed on behalf of Respondent Nos.2, 3 and 4. In that affidavit-in-reply, the Petitioners' activities have been referred to in detail. The claim of the Department is, though the Petitioners pay service tax as Tour Operator in some cases and transactions, they have not paid the service tax on the gross amount charged to the customers and did not include the amount of commission of sub-agents collected and paid by the Petitioners to such sub-agents. In some cases, Petit .....

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mukh appeared and his statement was recorded. The emphasis, throughout in the affidavit-in-reply, is that the Petitioner No.1-Company renders services and they cannot be distinguished from that of the hoteliers and resort owners. Else, they would not have collected the service tax and included that component in the invoices and bills. 12. There is a rejoinder affidavit filed to the affidavit-in-reply and which reiterates the contents of the Petition. 13. After the matter was heard earlier, we en .....

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t will complete the enquiry and, if it strongly believes, with supporting reasons and documents, that a prosecution is required to be launched or could be launched, only then, necessary steps for prosecution would be taken. Merely because there is a provision for prosecution, the same will not be resorted to. 14. Ordinarily, we would not have been required, with this clarification, to pass any order. However, the Petitioners' apprehension is that on par with some other cases, their officers .....

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e facts and circumstances of the present case, a larger question or issue will be required to be gone into. 16. We are clear in our minds and from the scheme of the Act and the Law as a whole that coercive measures, including effecting any arrest, would arise only when investigation has been completed and on launching the prosecution. If the prosecution is a criminal prosecution, then, there is no question of deviating or defeating from the Criminal Law. The Criminal Law contains several provisi .....

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