Specificity in show cause notices is essential: a vague tax notice under a multi-limbed provision cannot sustain demand.

A show cause notice under a multi-limbed taxing provision must specify the exact sub-clause invoked so the assessee can meet the case against it. Where the notice refers only to the parent category under Section 65(19) of the Finance Act, 1994 without identifying the relevant limb, it is vague and denies an effective opportunity of defence. That defect goes to the root of the proceedings and cannot be cured by selecting a sub-clause later in adjudication or appeal. The resulting demand for service tax, interest, and penalties was therefore unsustainable, and the appeal was allowed.

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Issues: Whether the show cause notice was vitiated for failing to specify the sub-clause of Section 65(19) of the Finance Act, 1994 under which the appellant's services were proposed to be classified, and whether the demand of service tax, interest, and penalties could survive on that basis.

Analysis: Section 65(19) of the Finance Act, 1994 contains multiple distinct sub-clauses covering different species of taxable business auxiliary service, including an exclusion for information technology service. Where the Revenue seeks to tax an assessee under this provision, the notice must identify the precise sub-clause relied upon so that the assessee knows the exact case to meet. A notice that mentions only the parent category, without specifying the relevant limb, is vague and denies an effective opportunity of defence. Such a defect goes to the root of the proceedings and cannot be cured by the adjudicating or appellate authority by later selecting a sub-clause not stated in the notice. The adjudication in the present case therefore travelled beyond the notice and could not sustain the demand.

Conclusion: The show cause notice was fatally defective for want of specificity, the resulting demand was unsustainable, and the appeal was allowed in favour of the assessee.

Ratio Decidendi: A show cause notice under a multi-limbed taxing provision must clearly specify the exact sub-clause invoked, and a demand founded on a vague notice is void for breach of natural justice.

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