Service tax intimation is not a show cause notice; fresh notice may issue where liability was never finally decided.

A communication that merely called upon the assessee to pay service tax and warned of recovery action was only an intimation, not a statutory show cause notice. Since section 73(1) of the Finance Act, 1994 requires a proper notice before adjudication, the earlier writ direction could be modified to permit issuance of a lawful fresh notice, and the modification request was not treated as a disguised review. The later show cause notice was not vitiated, because the prior order had not finally decided the tax liability, no wilful disobedience was shown, and the assessee could raise objections in the adjudication process.

---

---

Issues: (i) Whether the earlier writ order could be modified so as to permit the competent authority to issue a show cause notice and adjudicate the service tax liability afresh. (ii) Whether the subsequent show cause notice was vitiated as being issued in violation of the earlier writ order and on the basis of a prior communication that was only an intimation.

Issue (i): Whether the earlier writ order could be modified so as to permit the competent authority to issue a show cause notice and adjudicate the service tax liability afresh.

Analysis: The prior writ order had not adjudicated the merits of the tax dispute. The operative direction treated the earlier communication as a show cause notice, but the Court held that the communication was in substance only an intimation calling upon the assessee to pay service tax and warning of recovery action if it failed to do so. Since Section 73(1) of the Finance Act, 1994 contemplates a proper show cause notice before adjudication, the earlier direction could legitimately be modified to allow issuance of a lawful notice by the appropriate authority. The Court also held that the modification request was not a review in disguise.

Conclusion: The modification petition was maintainable and was allowed in favour of the Revenue.

Issue (ii): Whether the subsequent show cause notice was vitiated as being issued in violation of the earlier writ order and on the basis of a prior communication that was only an intimation.

Analysis: The Court held that the earlier communication did not amount to a show cause notice or a demand, but only to an intimation. The later show cause notice was issued while the modification petition was already pending, and no wilful disobedience of the earlier order was made out. The assessee was not prejudiced by the interval in departmental action, and the Revenue was entitled to have the matter adjudicated in accordance with law. The challenge to the notice therefore could not succeed.

Conclusion: The show cause notice was upheld and the writ petition challenging it failed.

Final Conclusion: The Court upheld the Revenue's entitlement to issue a fresh show cause notice, found no violation of the earlier order, and left the assessee to pursue objections in the adjudication process.

Ratio Decidendi: A communication that is merely an intimation to pay tax is not a substitute for the statutory show cause notice required before adjudication, and a writ order that has not finally decided the tax liability may be modified to permit issuance of a proper notice under the governing statute.

---