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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. KULKARNI, KISHORE C. SANT, JJ.
Adv. Pooja Patil – Appellant
Versus
The Deputy Commissioner, CGST and CX Division VI, Raigad Commissionerate & Ors. - Respondents
Writ Petition No.1085 of 2024
Decided on : 24–01-2024
Service Tax - Jurisdictional Issue - Finance Act, 1994, Section 73(1), Section 78, Section 771(1)(c), Section 77(1)(a), Section 70(1), Central Goods and Service Tax Act, 2017, Section 174 - Notification No.25/2012-Service Tax, Notification No.30/2012-Service Tax
Fact of the Case:
The petitioner, an advocate, challenged an Order-in-Original for recovery of service tax, interest, and penalties. The petitioner contended lack of jurisdiction and procedural illegalities, citing non-receipt of show-cause notice and exemption of advocates from service tax.
Finding of the Court:
The court found a breach of natural justice and failure to consider the exemption notifications. It noted that the Designated Officer acted without jurisdiction and contrary to binding notifications, leading to the quashing of the impugned order.
Issues: Jurisdictional challenge, procedural illegalities, non-receipt of show-cause notice, exemption of advocates from service tax.
Ratio Decidendi: The court held that the Designated Officer acted without jurisdiction and contrary to binding notifications, leading to the quashing of the impugned order.
Final Decision: The petition was allowed, and the impugned order was quashed.
JUDGMENT :
G.S. Kulkarni, J.
1. This Petition under Article 226 of the Constitution of India assails an Order-in-Original dated 26th October, 2023 passed by the Deputy Commissioner, CGST and C. Excise, Raigad, whereby an amount of Rs.35,82,298/- towards service tax under the provisions of Section 73(1) of Finance Act, 1994 read with Section 174 of Central Goods and Service Tax Act, 2017, has been ordered to be recovered from the Petitioner interalia with interest and penalty. The operative part of the impugned order reads thus :-
| “ORDER (i) I confirm the Service Tax demand of Rs.35,82,298/- (Rupees Thirty Five lakh Eighty Two Thousand Two Hundred and Ninety Eight Only) (including E. Cess SHE Cess, Swachh Bharat Cess and Krishi Kalyan Cess as and where applicable) under the proviso to Section 73(1) of Finance Act, 1994 read with Section 174 of Central Goods and Service Tax Act, 2017 (CGST Act, 2017) and the same should be recovered from M/s. Pooja Chandrashekhar Patil forthwith. (ii) I order recovery of Interest at appropriate rates and as applicable in force, on the demand confirmed at (I) above, under Section 75 of the Finance Act, 1994 read with Section 174 of Central Goods and Services Tax Act, 2017 from M/s. Pooja Chandrashekhar Patil. (iii) I impose Penalty of Rs.35,82,298/- on M/s. Pooja Chandrashekhar Patil under the provisions of Section 78 of the Finance Act, 1994 read with Section 174 of Central Goods and Services Tax Act, 2017, however, the benefit of reduced penalty is available to M/s. Pooja Chandrashekhar Patil in terms of Second proviso to Section 78 of the Finance Act, 1994. (iv) I impose Penalty of Rs.10,000/- on M/s. Pooja Chandrashekhar Patil under Section 771(1)(c) of the Finance Act, 1994 read with Section 174 of Central Goods and Services Tax Act, 2017, as discussed under para 15.4 above. (v) I impose Penalty of Rs.10,000/- on M/s. Pooja Chandrashekhar Patil under Section 77(1)(a) of the Finance Act, 1994 for failure to take registration in accordance with the provisions of section 69 of the Finance Act, 1994, as discussed under para 15.5 above. (vi) I impose Late fee of Rs.1,20,000/- under Section 70(1) of the Finance Act, 1994 read with Rule 7(C) of the Service Tax Rules, 1994 for late/non filing of ST-3 returns beyond the due date and order recovery of the same from M/s. Pooja Chandrashekhar Patil, as discussed under para 15.6 above.” |
2. The Petitioner has contended that she is an advocate practicing in this Court. The primary contention of the Petitioner in assailing the impugned order is to the effect that Respondent No.1 in passing the impugned order has acted in patent lack of jurisdiction, hence, interference of this Court in the present proceeding would be justified. It is contended that apart from this, there are several procedural illegalities, amounting to a breach of the principles of natural justice, in passing such order.
3. The Petitioner has contended that on 5th October, 2023, an email was received by the Petitioner to attend a hearing on 17th October, 2023, on which date, the Petitioner appeared through her Chartered Accountant. On 18th October, 2023, the Petitioner addressed a letter to the Designated Officer attaching an email dated 5th October, 2023 which merely referred to the show-cause notice dated 24th December, 2020, which was never received by the Petitioner. It was recorded that even the Chartered Accountant who represented the Petitioner was not furnished a copy of the show-cause notice, as also the website referred only to the personal hearing letter. It was pointed out that neither Service Tax nor GST were applicable and/or payable by advocates, hence any attempt to pass an order would be without jurisdiction. It is contended by the Petitioner that on such backdrop instead of the proceedings being dropped on 9th January, 2024, the Petitioner by email received the impu
AI
The court emphasized the importance of considering jurisdictional issues and adherence to binding notifications in tax matters.
Service tax demands confirmed without valid service of notice violate natural justice principles, leading to appeal's success.
Proper service of notices is essential for upholding natural justice, and jurisdiction must be established based on the correct address of the party involved.
Court held that proper grounds for invoking extended limitation for tax demands must demonstrate intent to evade payment, and procedural fairness must be maintained in tax assessments.
Tax liability must be conclusively determined under the governing statute and cannot be established through inferences or analogies from third-party data. The invocation of extended limitation period....
Court held that tax demands require adherence to statutory limits, and if payment is made prior to notice issuance, penalties are not justified.
Writ petitions against quasi-judicial authorities are not maintainable if statutory remedies are available unless exceptional circumstances like natural justice violations are proven.
Tax liability must be established based on actual statutory provisions, not presumptions; authorities cannot invoke extended limitation without finding willful non-disclosure.
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