Tanushree Logistics Pvt. Ltd. and Others vs Union of India and Others

Instant petition is directed against the show cause notice dt. 15/10/2014 (Annx. 20) served by the Commissioner, Central Excise Commissioner ate, Jaipur-I, Jaipur against the services of ''supply of tangible goods'' under sub clause (ZZZZj) of clause (105) of section 65 of the Finance Act, 1994 (declared service as per Sec. 66E(f) of the Finance Act, 1994 from July, 2012 onward). The show cause notice pertains to the period from 01/04/2009 to 31/01/2014 as per Annexure-''A'', enclosed with the notice.

The petitioner is a private limited company incorporated under the Indian Companies Act, 1956 and is engaged in the business of transportation of tangible goods. It is contended by the petitioner that search was conducted on 21/22.02.2014 and after the material was collected summons/notices were issued to the petitioner on 24/02/2014, 06/03/2014, 19/03/2014, 10/04/2014, 09/05/2014, 11/08/2014 & 18/09/2014 but the Director of the petitioner company, as alleged, avoided his presence on one pretext or other and he did appear on 18/09/2014 and tendered his statement u/Sec. 14 of the Central Excise Act, 1944 and thereafter did not furnish any explanation. The material, which came on record and relied upon by the revenue authorities of Central Excise, being a quasi-judicial authority, served a show cause notice dt. 15/10/2014 and called upon the petitioner to explain within the period stipulated which can be taken note of from the bare perusal of Para 25 of the show cause notice impugned herein which reads ad-infra:--

"Now, therefore, M/s. Tanu Shree Logistics Pvt. Ltd., Near Aaraam Hotel, Jaipur-Ajmer National Highway No. 8, Gram-Gidani, Dudu, Jaipur are required to show cause and explain to the Commissioner, Central Excise, Jaipur-I, Statue Circle, C Scheme, Jaipur within 30 (thirty) days of the receipt of this notice as to why:

(a) Service Tax amounting to Rs. 55.604 Crores (Rs. Fifty Five Crores Sixty Lacs Forty Thousand) (including [Education Cess & SHE Cess) should not be demanded and recovered from them under proviso to Sub-Section (i) of Section 73(1) of the Finance Act, 1944.

(b) Interest should not be demanded and recovered from them under the provision of Section 75 of Finance Act, 1994.

(c) Penalty under Section 77 of Finance Act, 1994 for non filing of statutory return in relation to the Service Tax.

(d) Penalty under Section 78 of Finance Act, 1994 should not be imposed upon them for suppressing value of taxable services rendered by them."

It is vehemently contended by counsel for the petitioner that documentary evidence, which gives support to the case of the petitioner and which is already on record, was liable to be taken care of but in the show cause notice impugned herein the authority has failed to take notice and has prejudged the issue and has arrived to a conclusion that the petitioner has evaded service tax to the tune of Rs. 55.604 crores on the entire consideration of Rs. 488.2532 crores and the authority has made up his mind and is bound to create unnecessary and abnormal demand and calling for his reply to the impugned notice remains a empty formality and is not going to serve any purpose. It is further contended that the statements recorded during search and indicated in the show cause notice impugned herein, are under duress and cannot be read against him. He further contended that the Panchnama, drawn on 21/02/2014, indicates the factual matrix of the matter and the proceedings initiated against him are in clear violation of the scheme of the service tax and contended that if the show cause notice impugned herein is read in full, it shows that the authority has prejudged the matter and calling upon the petitioner to file written reply is to comply with the basic requirement of natural justice and in support relied upon judgment of Single Bench of High Court of Madras of M/s. Bharat Marine Co. vs. The Commissioner of Customs (Seaport-import): 2014-TIOL-1703-HC-MAD-CUS and of Hon''ble Apex Court: ORYX Fisheries Private Limited Vs. Union of India (UOI) and Others,

Indisputably, reply to show cause notice impugned herein has not been filed so far although the time of filing reply to show cause notice was thirty days. He further contended that, if the authority is biased in approach from the initial stage of issuing notices, show cause notice, impugned herein, further opportunity is of no use and in these facts & circumstances, the petitioner had no option except to approach this Court under the extraordinary jurisdiction of this Court u/Art. 226 of the Constitution of India.

We have heard counsel for the petitioner and have also perused the show cause notice impugned herein dt. 15/10/2014.

On perusal of the impugned show cause notice, it reveals that there is a complete narration of facts regarding service tax liability and after referring to the facts, has prima-facie, come to the conclusion, on the basis of material which came on record and revealed during the course of search and the notices earlier served calling upon the petitioner to come with an explanation with documentary evidence, if any on which the petitioner wishes to place reliance. On perusal of the show cause notice, we feel that it is only a prima-facie view which the Commissioner, as a quasi-judicial authority, has expressed at this stage, placing reliance on the material collected, at the time of search and in our view, it cannot be said that the Commissioner has prejudged the matter of imposition of service tax and that may be considered after the reply to show cause notice is submitted by the petitioner. Admittedly, the petitioner has not filed any explanation and did not care to appear on several opportunities to explain before the revenue authorities and without even filing of reply to the show cause notice, approaching to this Court, in our considered view, is premature and if reply to the show cause notice is furnished, it is always open for the authority to consider and decide in accordance with law.

In our view, what has been expressed by the Commissioner in the show cause notice, is his prima-facie view and after considering the reply, if filed to the show cause notice by the petitioner, if any adverse order is passed in the proceedings initiated by the competent authority, as expressed by us earlier, it is always open for the petitioner to avail remedy which the law permits. The judgments, on which counsel placed reliance, are of no assistance for the reason that the High Court of Madras in the case of M/s. Bharat Marine Co. (supra), specifically referred to Paragraph 14 of the show cause notice the finding of guilt has been recorded and that prejudged the issue which is not in the instant case. The judgment of the Apex Court: Oryx Fisheries Private Limited (supra), is a case where reply was filed and final order also came to be passed after opportunity of hearing being afforded and the registration certificate of lithe appellant was finally cancelled and thereafter the matter traveled through appeal and the Apex Court observed in reference to the show cause notice and other proceedings culminated out of the finality of the decision of the quasi-judicial authority. The judgment relied upon is also of no assistance to the present petitioner.

In our considered view, the instant petition, preferred by the petitioner at this stage, is premature and does not require interference of this Court u/Art. 226 of the Constitution of India.

Consequently, the writ petition is premature and deserves to be dismissed. However, we make it clear that what is being observed by us herein above, is only for the purpose of disposal of the instant petition and the quasi-judicial authority may not be influenced/inhibited with observations and may take independent decision in accordance with law.

Resultantly, the writ petition and so also the stay application both stand dismissed.