AI Structured Summary
Not yet generated for this judgment
Judgment
Soumitra Pal, J.—The petitioner No. 1, a private limited company and the petitioner No. 2, one of its directors and shareholders, have challenged the show cause notice dated 9th October, 2007 issued by the Commissioner of Service Tax, Kolkata, the respondent No. 2 on various grounds.
Incidentally, in this writ petition, Central Warehousing Corporation, CTA Movers Pvt. Ltd. and J.M. Boxy & Go. Pvt. Ltd., are the other respondents being respondent Nos. 4, 5 and 6 respectively. The respondent No. 5, as it appears from the writ petition, is a separate company promoted by the directors of the petitioner No. 1 and is having the same set of directors and shareholders as that of the petitioner No. 2. The petitioners are not claiming any relief against the respondent No. 5. It appears from the writ petition that the petitioners, who are rendering cargo handling service, transportation and also hiring, got themselves registered under the Finance Act, 1994 (Service Tax) on 6th October, 2004.
Submission has been made that though the income received for the period from 2003-04 to 2006-07 has duly been reflected by the petitioner No. 1 in its profit and loss account and nothing has been suppressed, yet on 14th March, 2007 a search and seizure was conducted at the premises of the petitioner No. 1 by the Service Tax Authorities. By a letter dated 23rd March, 2007 a demand of Rs. 19,80,000/- [approximately] was raised for the alleged service tax liability upto 2005-06. Thereafter, summons were issued u/s 34 of the Central Excise Act, 1944. The petitioner appeared and answered the queries. Incidentally, on 5th April, 2007 the petitioner addressed a letter to the authorities denying their liability to pay service tax as demanded by the letter dated 23rd March, 2007. Thereafter, show cause notice dated 9th October, 2007 was issued which is the subject matter of challenge in this case.
The matter was moved on 13th December, 2007 when after hearing the learned advocates for the parries, direction was given for filing of affidavits and an order was also passed directing, "that uptill 15th February, 2008 the proceeding initiated by the show cause notice may continue but no final order shall be communicated to the writ petitioner arising out of the adjudication proceeding initiated by the show cause notice." It is to be noted that the interim order passed has been extended from time to time and is continuing till this date.
Be it noted that the Service Tax Authorities, the respondent Nos. 1, 2 and 3 and Central Warehousing Corporation, a Government of India undertaking, the respondent No. 4 have filed their respective affidavits and are on record.
Learned advocate for the petitioner, reiterating the statements made in the writ petition, has submitted that the petitioner has given an effective reply to the queries pursuant to the summons and has provided the balance sheet and therefore, the show cause notice alleging non-payment of service tax is not proper and illegal. Moreover, relying on the affidavit filed on behalf of the Central Warehousing Corporation it has been submitted that the petitioner was working as a sub-contractor of the respondent No. 5 and the respondent No. 4 has collected service tax on behalf of the petitioner No. 1 and deposit of the said amount has been made to the Service tax authorities.
Learned advocate for the respondent Nos. 1, 2 and 3 submits that: since the petitioner No. 1 is registered under the Service Tax Act, as evident from page 63 of the writ petition, the petitioner No. 1 ought to have filed its return and as no service tax was paid, the show cause notice; issued u/s 73 is just and proper and the petitioner is liable to pay service tax.
Heard the learned advocates for the parties.
The issue in question is whether the service tax has been paid by the petitioner No. 1 or whether on its behalf the respondent Nos. 4,5 and 6 or service recipients have paid the tax or not.
In my view, it is a question of fact, which cannot be gone into in the writ jurisdiction. Therefore, as the show cause notice dated 9th October, 2007 has been issued, the petitioner is at liberty to file reply to the same by 30th June, 2009. If such written reply is filed within the time as stipulated, the Commissioner of Service Tax, Kolkata, the respondent No. 2 shall dispose of the same by passing a reasoned order-afresh to be communicated to the parties after giving an opportunity of hearing to the petitioner within six weeks from the date of submission of written reply by the petitioner. At the time of hearing, the petitioner shall be at liberty to take all the points which have been agitated in the writ petition and can rely on affidavit-in-opposition affirmed on 21-1-2008 by Kalu Ram on behalf of the Central Warehousing Corporation, the respondent No. 4 and the affidavit-in-opposition affirmed by Nanda Kumar Bhattacharjee on 2nd April, 2008 on behalf of the respondent Nos. 1, 2 and 3 and the respondent No. 2 in his reasoned order shall deal with the same.
It is needless to mention that the respondent No. 2 while passing the order shall verify the documents produced since a submission has been made by the petitioner that there is going to be a double taxation.
I make it clear that I have not gone into the merits of the case and all points are left open to be dealt with by the respondent No. 2.
It is also made clear that the respondent No. 2 shall proceed after representation is filed without giving any unnecessary adjournment to either of the parties.
Learned advocates of the parties are permitted to take down the gist of this order for communication and the revenue authorities shall act on the basis of such communication.
No order as to costs.
Urgent photostat certified copy of this order, if applied for, be supplied to the appearing parties on priority basis.