2014 (3) TMI 835 - HC - Service Tax

Court defers validity assessment of non-compliance reasons under Central Excise Act, 1944, due to ongoing investigation. Cooperation advised.

Vigneshwara Developers Private Limited And Others Versus Union of India And Others

The Court refrained from assessing the validity of the petitioner's reasons for non-compliance with the summons under the Central Excise Act, 1944, due to ... Quashing of the summons issued under Section 14 - It is contended that the petitioner is a service tax compliant company and has been regularly filing returns which were duly assessed to service tax under the provisions of Finance Act, 1994. - It is further contended that Appearance on its behalf could not be ensured on account of an ongoing investigation into another company - Held that:- whether the petitioner’s reason for not responding to the summons issued in this case on 26.02.2014 was justifiable or valid reasons cannot be considered in the writ proceedings. However, it is open to the petitioner or its Directors to duly bring the reasons to the notice of the concerned official at the earliest available opportunity, even in ongoing investigations in the matter of M/s Vigneshwara Developwell Pvt. Ltd., cooperate and produce all the necessary materials in support of their contentions - Decided against appellant. Issues:Quashing of summons under Section 14 of the Central Excise Act, 1944 due to ongoing investigation into another company with common Directors.Analysis:The petitioner sought the quashing of the summons issued under Section 14 of the Central Excise Act, 1944, dated 26.02.2014, arguing that they are a service tax compliant company regularly filing returns assessed under the Finance Act, 1994. The petitioner explained that due to an ongoing investigation into another company, M/s Vigneshwara Developwell Pvt. Ltd., which shares common Directors with the petitioner, they were unable to ensure their presence in response to the summons. The Court noted that the reasons for not responding to the summons could not be considered in the writ proceedings. However, the petitioner or its Directors were advised to promptly bring forth their reasons to the concerned official, cooperate in the ongoing investigation related to M/s Vigneshwara Developwell Pvt. Ltd., and provide all necessary materials to support their contentions.The Court emphasized that the justifiability of the petitioner's reasons for not responding to the summons issued on 26.02.2014 could not be assessed in the writ proceedings. It was clarified that the petitioner or its Directors should communicate the reasons to the relevant official at the earliest opportunity, cooperate in the ongoing investigations concerning M/s Vigneshwara Developwell Pvt. Ltd., and furnish all essential documents to substantiate their claims. The writ petition was disposed of, including all pending applications, with a reservation of all rights and contentions of the parties. The order was directed to be issued urgently.In conclusion, the judgment addressed the petitioner's plea to quash the summons under the Central Excise Act, 1944, due to their involvement in an ongoing investigation related to another company with common Directors. The Court refrained from evaluating the validity of the petitioner's reasons for non-compliance in the writ proceedings but advised cooperation, disclosure of reasons to the concerned official, and submission of necessary materials to support their contentions. The order disposed of the writ petition and reserved all rights and contentions of the parties, with instructions for urgent issuance of the order.