Mandatory show-cause notice service invalidates service-tax adjudication when authorities cannot prove statutory notice was served on the assessee.

Service of a show-cause notice under Section 73(1) is mandatory before service-tax recovery proceedings. Where the assessee specifically denies receipt, the authorities must prove issuance and service through the notice itself or reliable evidence such as postal receipts, tracking records, or acknowledgment. In the absence of such proof, adjudication denies the assessee the statutory opportunity to respond and cannot be sustained. The adjudication order was quashed for non-compliance with the notice requirement. Fresh notice may be issued, with the period from 07.10.2021 excluded when computing limitation.

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Issues: Whether the service-tax adjudication order could be sustained where the authorities failed to establish issuance and service of the show-cause notice required under Section 73(1).

Analysis: Service of a notice requiring the assessee to show cause is mandatory before recovery proceedings under Section 73(1). Where receipt of the alleged notice was specifically denied, the burden lay on the authorities to prove its issuance and service. The authorities produced neither the alleged notice nor postal receipt, tracking details, or acknowledgment evidencing service. The adjudication consequently proceeded without affording the assessee the statutory opportunity to respond. Since the challenge was confined to non-service and did not deny issuance of the alleged notice, the intervening period from 07.10.2021 was directed to be excluded in computing limitation for fresh action.

Conclusion: The adjudication order was invalid for non-compliance with the mandatory notice requirement and was quashed. The revenue may issue a fresh show-cause notice, with the specified period excluded for limitation purposes.

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