Court allows petitioner to respond to show cause notice within six weeks, emphasizes fair hearing.

The court disposed of the writ petition, allowing the petitioner to respond to the show cause notice within six weeks. The adjudicating authority was directed to consider the petitioner's arguments thoroughly and provide a fair hearing before making a decision. No costs were awarded in this case.

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Issues Involved:
1. Validity of the show cause notice dated 15.10.2010.
2. Applicability of service tax on the activity of laying long-distance pipelines for carrying drinking water, sewerage, and untreated effluent water.
3. Limitation period for issuing the show cause notice.
4. Simultaneous invocation of sections 72 and 73 of the Finance Act, 1994.

Detailed Analysis:

1. Validity of the Show Cause Notice:
The petitioner challenged the show cause notice dated 15.10.2010 issued by the Commissioner of Service Tax, claiming it was without jurisdiction and violative of the provisions of law. The petitioner argued that the notice was impermissible under the Finance Act, 1994, and relied on Circular No. 80/10/2004-ST dated 17.9.2004, which clarified that non-commercial constructions by government organizations are not taxable. The court, however, found that the notice to show cause was not issued indiscriminately and required adjudication by the competent authority.

2. Applicability of Service Tax:
The petitioner contended that their activities of laying long-distance pipelines for the Delhi Jal Board (DJB) and Delhi Metro Rail Corporation Ltd. (DMRC) were public utility services and should not attract service tax. The petitioner referenced the Finance Act, 1994, and subsequent amendments, including the introduction of 'Works Contract Service' under sub-clause (zzzza) of Clause (105) of Section 65. The court noted that the petitioner could argue their non-liability to pay service tax before the statutory authority and that the adjudicating authority should consider all aspects before making a decision.

3. Limitation Period for Issuing the Show Cause Notice:
The petitioner argued that the show cause notice was barred by limitation, citing several judgments, including ITW Signode India Ltd. v. Collector of Central Excise and Bhatinda District Co-op. Milk P. Union Ltd. The court acknowledged that the question of limitation involves jurisdictional facts and must be determined by the adjudicating authority. The court did not find the notice to be issued indiscriminately without proper application of mind.

4. Simultaneous Invocation of Sections 72 and 73:
The petitioner questioned the legality of invoking both sections 72 and 73 of the Finance Act, 1994, simultaneously. The court held that this issue, along with other legal questions raised, should be adjudicated by the competent authority. The court granted the petitioner six weeks to file a reply to the show cause notice and directed the adjudicating authority to consider the petitioner's stand comprehensively and pass a reasoned order.

Conclusion:
The writ petition was disposed of, allowing the petitioner to file a reply to the show cause notice within six weeks. The adjudicating authority was instructed to consider the petitioner's arguments and provide an appropriate opportunity for a hearing before making a final decision. The court did not award any costs.

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