Appellants cannot challenge show cause notices unless issued without jurisdiction or are nullity

Karnataka HC dismissed appellants' challenge to summons requiring appearance before second respondent. Court held that show cause notices generally cannot be challenged unless they are nullity or issued without jurisdiction. Such notices do not infringe party rights, and jurisdictional objections can be raised before the issuing authority. Adverse decisions may be challenged through appeal or Article 226 writ petition. Since summons directed appellants to show cause before competent authority (Commissioner of Central Excise and Service Tax), no jurisdictional defect existed warranting interference with Single Judge's order.

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Issues involved:
Challenge to Summons No. 44/2016 dated 28.07.2016
Jurisdiction of the second respondent to issue summons
Validity of Annexure-B notification dated 16.09.2014
Competence of the second respondent to issue summons
Validity of Rule 3 of the Central Excise Rules, 2002
Validity of Rule 3 of the Service Tax Rules, 1994
Jurisdictional question regarding the Central Excise Officer
Validity of Rule 5 of Service Tax (Determination of Value) Rules, 2005
Failure to consider additional grounds raised in I.A. No. 2/2017

The judgment pertains to an intra-Court appeal challenging the order dated 30.09.2021 in W.P. No. 59487/2016 where the challenge to Summons No. 44/2016 summoning the appellants was rejected. The main contention was the jurisdiction of the second respondent to issue the summons and the validity of Annexure-B notification dated 16.09.2014 investing powers under Chapter V of the Finance Act, 1994. The appellants argued that the second respondent lacked jurisdiction and that the summons and proceedings by the fifth respondent would lead to duplication of jurisdiction over the service tax issue. The appellants also raised issues regarding the validity of certain rules and notifications. The learned Single Judge dismissed the writ petition, prompting the appeal.

The appellants contended that the learned Single Judge failed to consider their grounds properly and overlooked the application for additional documents and grounds. They argued that the jurisdictional Central Excise Officer for the appellants should be the fifth respondent, not the second respondent. The appellants cited a decision of the Hon'ble Apex Court to support their claim that only the proper Officer can determine the assessment and service tax. Additionally, they raised concerns about the validity of certain rules and the lack of provision for collecting service tax on expenses during a specific period.

In response, the respondents argued that the show cause notice was issued by the competent authority and that determination or assessment had not yet taken place. They emphasized that the appellants should reply to the show cause notice and avail remedies under the Act and Rules if needed. The respondents urged for the dismissal of the writ appeal.

The Court deliberated on the jurisdictional issues and ruled that the second respondent had the authority to issue the summons. The Court highlighted the relevant rules and notifications governing the appointment of Central Excise Officers and the jurisdiction of the second respondent. The Court concluded that there was no reason to interfere with the learned Single Judge's order regarding jurisdiction. The Court also addressed the appellants' contentions regarding additional grounds raised in I.A. No. 2/2017, emphasizing that such objections should be raised before the Authority for consideration.

Ultimately, the Court found no grounds to interfere with the learned Single Judge's order and rejected the writ petition. The appellants were granted permission to file their objections to the show cause notice and were directed to appear before the fifth respondent on a specified date to file their statement of objections.

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