Show cause proceedings may continue if the authority considers the applicable circular and the assessee's objections before final adjudication.

Show cause proceedings for alleged non-registration and non-payment of service tax were directed to continue rather than be quashed, with the authority required to consider Circular No. 123/5/2010-TRU and the petitioners' objections before passing final orders. The Court treated the matter as covered by earlier connected writ petitions and preserved the adjudication process while ensuring that the departmental circular and the assessees' responses were taken into account. The petitions were disposed of on that basis, with final decision-making left to the assessing authority after hearing the petitioners.

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Issues: Whether the impugned show cause proceedings were liable to be quashed and whether the assessing authority was bound to consider Circular No. 123/5/2010-TRU dated 24.05.2010 while proceeding further.

Analysis: The petitions challenged notices requiring the petitioners to explain non-registration and non-payment of service tax. The matter had already been considered in earlier connected writ petitions, where the Court held that the Department should proceed on the basis of the clarifications contained in the circular and decide the matter after receiving the petitioners' objections. Following that view, the Court treated the present cases as covered by the earlier order and directed the authority to bear in mind the circular, receive objections, and then pass final orders within the stipulated time.

Conclusion: The impugned proceedings were not quashed. The petitioners were granted an opportunity to file objections, and the authority was directed to decide the matter in the light of Circular No. 123/5/2010-TRU dated 24.05.2010.

Final Conclusion: The writ petitions were disposed of by preserving the show cause process while requiring the authority to consider the Board's circular and complete adjudication after hearing the petitioners.

Ratio Decidendi: Where tax show cause proceedings are under challenge, the authority may be directed to continue the adjudication after considering the applicable Board circular and the assessee's objections instead of quashing the proceedings outright.

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