2018 (6) TMI 758 - HC - Service Tax

Court Dismisses Writ Petition Over Service Tax Demand, Emphasizes Procedural Compliance

M/s. Indus Integrated Information Management Limited Versus Principal Commissioner of CGST & CS, Kolkata And Ors.

The Court dismissed the writ petition challenging the final order of determination of demand regarding Service Tax payable by the petitioner, citing that ... Demand of service tax - obligation on the part of adjudicating authority to decide within one year from the date of SCN - validity of demand after repealing of service tax post GST - derailing of adjudication process - time limitation - Section 73(4B)(b) of the Finance Act, 1994 - Held that:- This Court finds that the arguments advanced by learned Counsel for the petitioner, are based on hyper technicalities which, in the considered view of this Court, are not of a nature so as to derail the adjudication process. This Court is satisfied that the statutory provisions relied upon by Ld. ASG to take care of the contingencies sought to be exploited by the petitioner/assessee company for filibustering the adjudication. In the backdrop of the recorded discussion surrounding the pure legal issues raised by the parties, affidavits are not invited. Allegations made are therefore deemed to be denied. Petition dismissed - decided against petitioner. Issues:Challenge to final order of determination of demand dated 14th July, 2017 by the Respondent No.1/Principal Commissioner, Central Tax, Kolkata North CGST & CX, Commissionerate, Kolkata regarding Service Tax finally payable by the petitioner/Assessing Company along with interest and penalty.Analysis:The primary issue in this case revolves around the final order of determination of demand issued by the Respondent No.1. The petitioner challenges this order on the grounds of procedural irregularities and violation of statutory provisions. The petitioner's counsel argues that as per Section 4(B)(b) of the Finance Act, 1994, the adjudication should have been completed within one year from the date of the Demand Notice. It is contended that the proceedings should have been concluded by 13th May, 2017, based on the date of issuance of the demand notice. The petitioner further asserts that the Hearing/Adjudicating Authority was obligated to provide reasons for not concluding the proceedings within the specified period, which was not done in this case. The petitioner also raises the issue that the order determining the demand was issued by a different officer (Respondent No.1) than the one who conducted the hearing (Respondent No.2), citing legal precedent to support the argument that the individual who conducts the hearing should be the one to decide.The Respondents, represented by the Additional Solicitor General, argue that the officer who issued the final order (Respondent No.1) is the same individual as the one who conducted the hearing (Respondent No.2), with the change in designation due to the implementation of the GST Act, 2017. The Respondents rely on the deeming provisions of Section 3 of the Central Goods and Services Tax Act, 2017 to support their position. It is contended that the repeal and substitution provisions under Section 174(2) of the 2017 Act ensure that pending adjudications are not affected by the change in law. The Respondents assert that there is no violation of natural justice or limitation in this case, and the legislative intent was not to hinder ongoing adjudications.The Court, after considering the arguments presented by both parties, opines that the petitioner's contentions are based on hyper technicalities that do not warrant derailing the adjudication process. The Court finds that the statutory provisions invoked by the Respondents adequately address the issues raised by the petitioner. Consequently, the Court dismisses the writ petition, emphasizing that the legal issues raised do not justify further affidavits or investigations. The Court deems the allegations made by the petitioner to be denied, and orders the dismissal of WP No. 26509(W) of 2017.In conclusion, the judgment highlights the importance of procedural compliance, statutory interpretation, and the impact of legislative changes on ongoing adjudications. The Court's decision underscores the need to balance legal technicalities with the overarching objective of ensuring a fair and efficient adjudicatory process within the framework of the law.