The demand for service tax must be in conformity with the proposals made in the show cause notice and should not traverse beyond such proposals, violating the principles of natural justice.

JUDGMENT :

(Prayer: Writ Petition filed under Article 226 of the Constitution of India, praying to issue a Writ of Certiorari, calling for the records relating to the impugned Order-in-Original No.07/2016-ST dated 25.02.2016 passed by the first respondent and to quash the same as illegal, without authority of law and goes beyond the scope of the show cause notice.)

1. With the consent of both parties, the present Writ Petition is heard through Video Conferencing on 23.09.2020.

2. The petitioner herein, who is a contractor for carrying out certain contracts for the Nevyeli Lignite Corporation Ltd., (NLC) and registered as a service provider for Management, Maintenance and Repair services; Manpower Supply Service; Civil and Industrial Construction Service; and Works Contract Service, filed his returns under the Service Tax Law for the period 2009-2010 to 2012-2013.

3. By a show cause notice dated 13.10.2014, the Department proposed to demand service tax on a) Manpower Recruitment or Supply Agency; b) Management, Maintenance or Repair services; c) Works Contract and Commercial or Industrial Construction. The petitioner had given a reply dated 14.11.2014 stating that the proposed demand does not indicate the exact amount under each type of services and there is no mention under which category the service tax has been demanded. The first respondent herein, had passed the impugned order dated 25.02.2016, stating that the petitioner is liable to pay service tax for a)Site formation and clearance, excavation, earth moving and demolition services b)Works contract service and c)Maintenance and Repair service for the work done by the petitioner for the road works from Melpathy to Virudhachalam Cuddalore Main Road. The said order is put under challenge in the present Writ Petition.

4. The main grounds raised by the petitioner is that the demand of service tax on the grounds relied upon in the impugned order is not in conformity with the proposals made in the show cause notice and that the notice is vague and without any details.

5. The learned counsel for the first respondent on the other hand, placed reliance on the averments in the counter affidavit dated 25.07.2020 and stated that the impugned order has confirmed service tax on Site formation and clearance, excavation, earth moving and demolition services to the tune of Rs.15,35,830/- as against the proposed service tax of Rs.45,73,670/-, after taking all the submissions of the petitioner into consideration.

6. I have given careful consideration to the submissions made by the respective counsels.

7. It is a settled proposition of law that a show cause notice, is the foundation on which the demand is passed and therefore, it should not only be specific and must give full details regarding the proposal to demand, but the demand itself must be in conformity with the proposals made in the show cause notice and should not traverse beyond such proposals.

8. A Hon'ble Division Bench of this Court in the case of M/s.Thirumurugan Enterprises, Neyveli V. CESTAT and another in CMA Nos.764 to 768 of 2015, had set aside the orders of the Tribunal on the ground that the proposal of taxable service in the show cause notice was vague and bereft of details. The relevant portions of the order reads as follows:-

“13. However, a careful perusal of the orders of the adjudicating authority, the Commissioner (Appeals) as also the Tribunal would reveal that the Commissioner (Appeals) has decided the issues on two aspects, viz., one on the vagueness of the show cause notices stating that it is bereft of details and being without clarity and the other on the plea of limitation. The Tribunal, however, in its order, while extracting the portion of the order of the Commissioner (Appeals) was of the view that the Revenue had discharged its burden by producing the statements given by NLC and that the assessees did not dispute it at any point of time and that the entire demand was raised on the basis of the statements provided