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TMI Blog2019 (6) TMI 1664X X X X Extracts X X X X X X X X Extracts X X X X ..... the grounds of challenge, facts and question of law involved in these petitions are almost similar, they are simultaneously decided by this common order. 3. The main issue raised in the impugned notice is about the demand of service tax on the license fee paid by the petitioners to Indian Railways for award of license for operation, management and supply of catering services in the Trains of Indian Railways. According to the impugned notice, the petitioners have paid license fees to Indian Railways but have not paid service tax thereon under reverse charge basis. 4. Learned counsel for the petitioners contended that the challenge is to the show cause notice issued to the petitioner(s) by the Principal Additional Director General, Directorate General of GST Intelligence whereby respondent no.3 had proposed to recover the service tax from the petitioners along-with interest and penalties on the license fee by treating the same as consideration towards the "support services" provided by the Indian Railways to the petitioners. It is contended that the petitioners are providing on-board mobile catering service to the train passengers and the Indian Railways has out-sourced such facil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed right to use to the other party's property for the specific purpose. Therefore, a limited right was granted to the petitioners for which the licence fee was paid by the petitioners to the Railways, as such, the language of the show cause notice which do not run parallel to the agreement would show that it is premeditated. It is further contended that the show cause notice used the words "willfully suppressed" as such, the authority issuing the notice has disclosed its mind that he is holding an opinion against the petitioners. 8. The further contention is that when the terms of the agreement is interpreted, it would show the kind of show cause and the ground of challenge is a pure question of law involved. Referring to case law reported in 2016 42 STR 625 Deputy Commissioner of Central Excise vs. Sushil & Company it was contended that the license fee has been paid at the time of initial agreement which was meant for providing access to the infrastructure of railways and the amount of fee paid by the licensee is also an admitted fact. As such, the disputed questions of law do not arise at all for consideration. 9. It is stated that the issue as to whether the support servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ege consequently cannot be a taxable factor. 11. Lastly it is stated that the sovereign functions are not treated as support service inasmuch as providing food by the Railway Board under the sovereign function, consequently no tax can be leviable, as such, the petitions deserve to be considered for admission. 12. Per contra, learned counsel for the respondent opposes the argument and would submit that the petitioners have rushed to the Court only on issuance of show cause notice, therefore, the petitions are liable to be dismissed. He further submits that the petitioners can freely agitate their grievance before the authority before whom they have been given the opportunity of hearing and instead of placing the grievance before the Authority, they have come to the Court with these petitions. He placed reliance on a decision rendered in case of AVM Studio Vs. The Union of India (UOI) and others W.A.Nos. 104 & 105 of 2008 and M.P.Nos.1 of 2008 decided on 11.03.2008 and Oryx Fisheries Private Limited Vs. Union of India 2011(266) E.L.T. 422 (SC) . He further placed reliance in case of Siemens Ltd. Vs. State of Maharashtra 2007 (5) STR 3 (SC) and would submit that under the situation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hom the show cause notice has been issued must be told the charges against him at that stage. Here the show cause notice would show that those charges of suppression have been arrived at 10after consideration of the preliminary submission. On the contrary, the subject show cause notice gives an opportunity to rebut the allegations before Authority to prove their innocence which is also in conformity with the ratio of Oryx Fisheries Pvt. Ltd (supra). Para 28 of the said judgment is relevant here and quoted blow: "28. It is no doubt true that at the stage of show cause, the person proceeded against must be told the charges against him so that he can take his defence and prove his innocence. It is obvious that at that stage the authority issuing the charge sheet, cannot instead of telling him the charges, confront him with definite conclusion of his alleged guilt. If that is done, as has been done in this instant case, the entire proceeding initiated by the show cause notice gets vitiated by unfairness and bias and the subsequent proceeding become an idle ceremony." 16. Further in the light of the ratio laid down in case of AVM Studio decided by the Madras High Court (supra), the a ..... 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