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2025 Supreme(Mad) 4229
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
RMT.TEEKAA RAMAN, N.SENTHILKUMAR, JJ.
Joint Commissioner, Office of the Commissioner of CGST & Central Excise - Appellant
Versus
Aravind Eye Hospital - Respondent
W.A.(MD) No.641 of 2019 and C.M.P.(MD) No.5348 of 2019
Decided on : 29-01-2025
Advocate Appeared:
For the Appellant : Mr.N.Dilipkumar
For the Respondent: Mr.Joseph Prabakar
Procedural compliance is essential for jurisdiction; failure to issue a fresh show cause notice invalidates the enquiry and subsequent orders.
Headnote:(A) Finance Act, 1994 - Sections 73, 75, 78 - Service tax - The Joint Commissioner issued a show cause notice for service tax default, which was challenged in W.P(MD)No.6020 of 2018. The learned Single Judge quashed the order for failure to issue a fresh show cause notice before the enquiry. (Paras 4, 11, 12)
(B) Jurisdiction - The authority passing the final order must issue the show cause notice. The failure to comply with procedural requirements renders the order invalid. (Paras 11, 13)
Facts of the case:
The Joint Commissioner issued a show cause notice for service tax defaults, which was challenged on grounds of procedural irregularity in the enquiry process.
Findings of Court:
The learned Single Judge's order was upheld, confirming the need for a fresh show cause notice before any final order.
Issues: The main issue was whether the Joint Commissioner had the authority to proceed without issuing a fresh show cause notice after the case was reassigned.
Ratio Decidendi: The court held that procedural compliance is essential for jurisdiction, and failure to issue a fresh show cause notice invalidates the enquiry.
Result: The appeal was dismissed, confirming the learned Single Judge's order.
JUDGMENT :
RMT.TEEKAA RAMAN, J.
This appeal is preferred by the respondent/Joint Commissioner challenging the order of the learned Single Judge of this Court in W.P(MD)No.6020 of 2018, dated 19.11.2018.
2. The brief statement of fact that may be relevant for the current purpose is that:
The Joint Commissioner had issued a show cause notice to the respondent alleging that the respondent had failed to pay service tax for certain courses conducted by them on payment for certain assessment years.
3. This Court is informed that originally a show cause notice was issued by the Commissioner of Central Excise, but even this was pending response. There was a change in the pecuniary limit and the case, thus, fell into the hands of the Joint Commissioner, the appellant herein. The respondent eventually responded to the show cause notice and participated in an enquiry conducted by the appellant and suffered a direction from the Joint Commissioner to pay the service tax, which the respondent had defaulted to pay with interest and penalty. This came to be challenged by the respondent before this Court in W.P(MD)No.6020 of 2018 on multiple grounds.
4. The learned single Judge allowed the Writ Petition on a solitary ground that the Joint Commissioner ought to have issued a fresh show cause notice before proceeding to hold the enquiry and held that the enquiry was faulty. This is now under challenge in this appeal.
5. The learned counsel for the appellant would contend that the order of the Joint Commissioner was challenged on multiple grounds, which includes the liability of the respondent to pay service tax on certain heads. It is made clear that this Court would not enter into pre-form facts something which the Appellate Tribunal ought to do, but, to confine its enquiry to the alleged error in jurisdiction of the appellant as has been found by the learned single Judge.
6. The learned counsel appearing for the respondent would contend that a circular cannot take place in the form of a notification, since it is only for departmental understanding and unless a notification is issued and published in the Government Gazette under the Central Board of Excise and Customs (CBEC), the same does not have any statutory force and to that effect, he drew our attention to the Notification No.44/2016-S.T., dated 28.09.2016. He would further contend that the notification of amendment is with regard to adjudication in respect of Section 83A of the Finance Act , 1994, whereas the factual matrix of the case on hand relates to Sections 73 , 75 and 78 of the said Act and to an extent of Rs.98,00,000/- and therefore, for want of statutory competency, the same has been quashed by the learned Single Judge.
7. After hearing the learned counsel appearing for the appellant, he is called upon to produce materials to the effect that Clause 2.11 of Circular No. 1053/2/2017-CX, dated 10.03.2017 has been complied with.
8(a) Pursuant to the direction, the learned Senior Standing Counsel for the appellant has filed notifications and circulars, ie., Notification No.30/2005-ST, dated 10.05.2005, Circular Nos.130/12/2010-ST, 1049/37/2016-CX and 1053/2/2017-CX, dated 20.09.2010, 29.09.2016 and 10.03.2017 and Notification No.44/2016-ST, dated 28.09.2016.
8(b) In circular No.1053/2/2017-CX, dated 10.03.2017 at para 2.11 is extracted hereunder for ready reference:
“2.11-Authority to adjudicate: A SCN must state the authority to whom the reply to the show cause notice required to be answered. In case of seizure of goods, the issue of show cause notice is mandatory before any order for confiscation of goods is passed. Where there is a change in the adjudicating authority, a corrigendum to the SCN may be issued and served on the notices to ensure that the notices have a fair opportunity to present their case to the appropriate adjudicating authority. Corrigendum to SCN is issued due to change in jurisdiction, monetary limit, re assignment, etc. The authority who issued the SCN has to issue the c
