Defective show cause notice cannot sustain service tax demand where no quantified tax liability was stated.

A service tax demand cannot be sustained where the show cause notice does not specify the quantum sought to be recovered and is confined to registration, returns and penalty-related defaults. The notice must clearly put the assessee to notice of the tax liability and invoke the proper recovery provision; retrospective validation of the rules does not cure a defective notice. On that basis, the impugned revisionary orders were held unsustainable and the demand was set aside in favour of the assessees.

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Issues: Whether a demand of service tax could be sustained when the show cause notices did not specify any quantum of tax and were confined to registration, returns and penalty-related defaults.

Analysis: The notices in question did not raise a quantified demand of service tax and merely called upon the assessees to obtain registration and file returns. The demand was sought to be sustained on the basis of retrospective validation of the service tax rules, but the deciding factor was the character of the notice itself. A notice intended to recover tax must disclose the amount demanded and put the assessee to notice of the liability in the manner required by law. In the absence of a specific demand under the proper provision, the subsequent demand could not be upheld.

Conclusion: The demand of service tax was unsustainable and was set aside in favour of the assessees.

Final Conclusion: The appeals succeeded because the impugned revisionary orders could not stand where the foundational show cause notices did not contain a proper quantified tax demand.

Ratio Decidendi: A demand of service tax cannot be sustained unless the show cause notice specifically indicates the amount demanded and is issued for recovery under the appropriate legal provision.

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