Point of Law: Court in exercising its powers under Article 226 has to mould the remedy to suit the facts of a case. If in a particular case a Court takes the view that the Income-tax Officer while passing an order under s. 132(5) did not give an adequate opportunity to the party concerned it should not be left with the only option of quashing it and putting the party at an advantage even though it may be satisfied that on the material before him the conclusion arrived at by the Income-tax Officer was correct or dismissing the petition because otherwise the party would get unfair advantage.

JUDGMENT :

Bela M. Trivedi, J.

1. The petitioners, by way of the present petition, have challenged the legality and validity of the show-cause notice dated 12.4.2019 (Annexure-D) issued by the respondent No.2 – the Additional Commissioner of Central Goods and Service Tax, Ahmedabad.

2. It may be noted that as stated in paragraph 3.7 of the petition, the petitioners have filed the petition not on the merits of the case, but have challenged the procedural infraction and the manner in which the impugned show-cause notice has been issued by the respondent authority. However, in order to understand the basic controversy it would be necessary to narrate the undisputed facts as transpiring from the record.

3. The petitioner No.1 is a partnership firm engaged in the business of purchase and sale of various textile machineries. The petitioner firm was registered under the erstwhile Sales Tax Regime, and now is also holding a valid and subsisting registration under the present GST Regime. The petitioner firm is holding the Service Tax Registration under the category of business auxiliary services and repair and maintenance services. In and around the year 2009, the petitioner firm had entered into an agreement with M/s.Arvind Limited for lease and demise of various machineries for a period of 8 years in consideration of rental payment by M/s.Arvind Limited. In terms of the said agreement exclusive right of possession and use was conferred upon the lessee with an option to purchase the said machines upon the conclusion of the said agreement. According to the petitioners, in terms of the provisions of the Central Sales Tax Act, 1965 read with Gujarat Value Added Tax Act, 2003, such transaction was to be treated in the nature of deemed sales and accordingly on the amount received under the said agreement, appropriate VAT/sales tax was discharged to the Government. Appropriate returns were also filed under the said Act evidencing payment of such tax under the transaction with M/s.Arvind Limited. However, during the course of audit for the year October 2013 to June 2017, the officers of the Service Tax Audit Team raised an objection that such consideration received from M/s. Arvind Limited was for supply of machineries and hence, was taxable service amenable to service tax. The Audit Team vide audit objection dated 28.2.2019 raised an objection for non-payment of service tax for the period 2016-17 to June 2017. Since it was not agreeable to the petitioner to the said view of the Audit Team, the said revenue para was concluded as “unsettled”. According to the petitioners, subsequent to the issuance of the said audit report, the petitioners had attempted to explain to the officers about the payment of appropriate sales tax for the transaction in question, however, all of a sudden the Superintendent of Central Tax Audit, Ahmedabad visited the office of the petitioners and handed over a copy of the letter dated 12.4.2019 at 13.55 hours, calling upon the petitioners to remain present on the same day at 14 hours before the respondent No.2. It was stated in the said letter/notice that if the petitioners did not appear for such pre-show-cause notice consultation, it would be presumed that the petitioners did not wish to be consulted before the issuance of show-cause notice. The petitioners, therefore, addressed a letter to the authority requesting for another date for pre-show-cause notice consultation as it was not possible to effectively make any representation on such a short notice. However, the respondent No.2 issued the show-cause notice on the same day demanding service tax to the tune of Rs.1,13,47,313/- along with interest and penalty on the premise that the transaction between the petitioners and M/s.Arvind Limited was in the nature of services rendered by the petitioners and amenable to the service tax, which was not discharged by the petitioners. The legality and validity of the said notice is under challenge in the present petition.

4. The l