Lawson Tours and Travels (India) P. Ltd. vs Dy. Director, DGCEI, Zonal Unit

This writ petition under Article 226 of the Constitution of India challenges the communications at Annexures A1 and A2 at pages 27 and 29 of the paper book addressed to the Branch Manager of South Indian Bank, Fort Mumbai on the subject of non-payment of Service Tax by the petitioner. The grievance of the petitioner is that the bank account is frozen and attached although there is no adjudication order passed by the concerned Department of the Revenue. Today, a show cause notice has been issued and pending adjudication thereof, such coercive measures have been taken and to paralyse the working of the petitioner.

Notice was issued on this writ petition by the petitioner''s Advocate and Mr. Thorat appearing on behalf of the contesting Respondent Nos. 1 and 2, on instructions, states that the adjudication order will be passed within a period of two months from today. Needless to clarify that the said order shall be passed in accordance with law.

We are not concerned as much with the adjudicating proceedings; the outcome thereof, leave alone the merits. But, we do find that there was no reason for the authority to hastily freeze and attach the bank account. If the Petitioner has a huge liability and which is towards taxes due to the Government, then, the least that was expected is that the competent authority decides the adjudication proceedings and by an appropriate order. It is only thereafter that the dues could be said to be crystallized and adjudicated. Presently, merely on issuance of show cause-cum-demand notice, copy of which is at Annexure ''B'', the bank account could not have frozen and attached. More so, when the petitioner claims to have made some payments. As a result of the above discussion, the writ petition succeeds. Both communications at Annexures ''A1'' and ''A2'' are quashed and set aside. The bank account of the Petitioner with South Indian Bank shall stand released from the attachment. However, we clarify that it would be open for the Revenue to initiate such proceedings and for recovery of the sums which are due and payable to it in the event of an order in adjudication proceedings being passed and, the dues being finalised in terms thereof. All such measures are open for being initiated and undertaken irrespective of disposal of this writ petition. We clarify that we have not expressed any opinion on the rival contentions as far as merits of the show cause notice.

The petitioner operates as an agent for some airlines. The complaint made is that similar communications have been addressed to M/s. Oman Airlines, M/s. Inter Globe Technology Quotient Pvt. Ltd. and Kuwait Airways. All these Debtors and who owe some money to the petitioner have been informed that they should not pay the petitioner but to the Government or depositing the same in Government treasury. Such communications are equally addressed pending the finalisation of the proceedings in pursuance of the show cause notice. They also would not stand scrutiny of law. In such circumstances, we grant leave to amend the writ petition. Amendment be carried out within one week from today and re-verification is dispensed with. Each of these communications are also taken to have been impugned and challenged in the writ petition. They are also quashed and set aside All concerned to act upon an authenticated copy of this order.