TMI Blog2019 (2) TMI 1622X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notices where avoidable. This is thus, a laudable initiative that has to be diligently pursued for maximum benefit to both the assessee as well as the Revenue. In the present case, the objections dated 07.05.2018 are in general terms. The petitioner points out that the document in the possession of the Department is of the year 2004, whereas the enquiry relates to the period October 2012 to June 2017. The business activities and methods of doing business are likely to have changed over the years. The obvious inference is that consultation has to be between the assessee and the officer and prior to the stage of issuance of show cause notice. In fine, I conclude that the consultative process as envisaged by the Department mandates an opportunity of personal hearing with the Assessee, face to face, in order to make the process an effective one. The petitioner, in this case, has been denied this opportunity. The respondent will call upon the petitioner to appear before him with all relevant materials and afford it full opportunity of hearing and consultation prior to issuance of show cause notice, if at all necessary - petition allowed by way of remand. - Writ Petition N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The second contention raised by the learned counsel is that the show cause notice seeks to bring to tax the income from certain activities carried out by the petitioner that have been clarified as 'business auxiliary service' or 'business support service', in terms of the Finance Act, 1994. The identical issue has been held in favour of the petitioner for later periods by the Customs, Central Excise and Service Tax Appellate Tribunal (CESTAT), vide its order dated 28.03.2018. Thus, even on merits, the impugned Show Cause Notice is untenable in law. 4. Per contra, Mr.Pramod Kumar Chopda, learned Senior Standing Counsel appearing for the respondent / Revenue would deny the allegation that the consultative process has not been followed in the present case. He draws attention to communication dated 03.05.2018 from the Assistant Commissioner of CGST and Central Excise to the petitioner putting the petitioner to notice about e-mail dated 19.04.2018 from the Audit Group regarding liability of service tax to the tune of ₹ 16,91,06,992/- received as per credit note from its foreign branches for the period in question. The detailed objection of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the foreign entities in their respective territories, is paid through credit notes on a monthly basis through an accounting and settlement mechanism after reconciliation process.' No personal hearing has been sought and none afforded by the Officer. 6. Thus, according to Mr.Chopda, the consultation process, has been faithfully followed in the present case and there is absolutely no justification on the part of the petitioner to have approached this Court. Mr.Chopda, urges that the writ petition is not maintainable and the petitioner be directed to appear before the Assessing Officer and place on record all materials in support of its contentions. He points out that the order of the CESTAT dated 29.08.2018 has not even been referred to in the petitioners' reply to the audit objection and that the impugned show cause notice only calls for the attendance of the petitioner and no grievance has been caused to it. He also draws the attention of this Court to the contents of the show cause notice, wherein the Assessing Officer has discussed the reply filed by the petitioner before the Audit Wing. Thus, there has been application of mind by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther expressed with regard to this. As per Circular No.985/09/2014-CX, dated 22.09.2014 Audit Commissionerate has been made responsible to issue the show cause notices, wherever necessary, after the audit objections are confirmed in the MCMs. Such show cause notices are answerable to and adjudicated by the Executive Commissioner or the Subordinate officers of the Executive Commissionerate as per the adjudication limits. In such cases, show cause notice issuing authority and adjudicating authority are different. 3.0 Hence, it is clarified that in cases where show cause notice issuing authority / Commissionerate and adjudicating authority / Commissionerate are different, pre-show cause notice consultation with the assessee concerned shall be done by the Commissioner of show cause notice issuing authority / commissionerate. 4.0 In cases where the SCN issuing authority is from the Executive Commissionerate, the pre-SCN consultation shall be done by the concerned commissioner. 5.0 All cases of pre-SCN consultation which leads to closure of case without issuing of SCN, either in part or whole, the file shall be submitted to the relevant reviewing authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, as Mr.Chopda has, that no personal hearing has been sought in this case and in any event, such hearing will be afforded by the respondent prior to his decision whether to confirm the proposals in the show cause notice or otherwise. 15. That may be so. However, the import of the Circulars / Instructions is to provide a medium for 'consultation' between the Assessee and the Department, prior to issuance of show cause notice. In fact, Master Circular dated 10.03.2017 uses the phrase 'such consultation shall be done by the Adjudicating Authority with the Assessee concerned'. 16. According to Black's Law Dictionary, the word 'consultation' is defined as follows: '1. The act of asking the advice or opinion of someone. 2. A meeting in which parties consult or confer. 3. International law. The interactive methods by which states seek to prevent or resolve disputes.' 17. The obvious inference is that consultation has to be between the assessee and the officer and prior to the stage of issuance of show cause notice. In fine, I conclude that the consultative process as envisaged by the Department mandates an opport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court in its judgment in that case observed as follows:- Rules of natural justice are not embodied rules nor can they be elevated to the position of fundamental rights. As observed by this Court Kraipak and Ors. v. Union of India : [1970]1SCR457 'the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law out supplement it.' It is true that if a statutory provision can be read consistently with the principles of natural justice, the courts should do so because it must be presumed that the legislatures and the statutory authorities intend to act in accordance with the principles of natural justice. But if, on the other hand, a statutory provision either specifically or by necessary implication excludes the application of any or all the principles of natural justice then the court cannot ignore the mandate of the Legislature or the statutory authority and read into the concerned provision the principles of natural justice. Whether the exercise of a power conferred should be made in accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly read into the provisions of the relevant sections a requirement of giving a reasonable opportunity of being heard before an order is made which would have adverse civil consequences for the parties affected. This would be particularly so in a case where the validity of the section would be open to a serious challenge for want of such an opportunity. 29. It is true that the time frame within which the order for compulsory purchase has to be made is a fairly tight one but in our view the urgency is not such as would preclude a reasonable opportunity of being heard or to show cause being given to the parties likely to be adversely affected by an order of purchase under Section 269UD(1). The enquiry pursuant to the explanation given by the intending purchaser or the intending seller might be a somewhat limited one or a summary one but we decline to accept the submission that the time limit provided is so short as to preclude an enquiry or show cause altogether. 30. In the light of what we have observed above, we are clearly of the view that the requirement of a reasonable opportunity being given to the concerned parties, particularly, the intending purchaser and ..... 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