TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 593
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....o M/s Union Bank of India, as being illegal and untenable in law, in the facts and circumstances of the instant case; (b) Issue a writ of Certiorari, or such other Writ, Order or direction in the nature of a writ of certiorari/mandamus, quashing the investigation proceedings mentioned in the above Annexure L, N, P and R against the petitioner's husband Late Sri. P.S. Harsha under the provisions of the Finance Act, 1994; (c) Issue a writ of mandamus, or such other writ, order or direction, as this Hon'ble Court may deem fit and proper, to Respondent No.3 and 4, to grant refund of Rs,39,86,126/- already recovered from the bank accounts of Petitioner's husband held with Respondent No. 5 and Rs. 10,031/- recovered from the bank account of Petitioner held with Respondent No. 8 and order payment interest on Rs. 39,86,126/- and Rs. 10,031/-from the date of recovery." 2. Facts in brief which has led to filing of this writ petition can be crystallized as under:- Petitioner is wife of Late. Sri. P.S. Harsha, who was the Proprietor of M/s - Rapid Marine Suppliers, Mangalore, (for short, 'M/s.RMS'), and said Firm which was a proprietary concern was registered with the S....
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....oncern of deceased Sri.P.S.Harsha namely the husband of the petitioner had failed to pay service tax of Rs. 36,48,659/- and interest on the same would amount to Rs. 10,81,000/- for the period 01.10.2009 to 30.09.2014 and he had also failed to file the statutory returns. It is also contended that out of the said amount, a sum of Rs. 24,98,451/- had been collected from the customers by the proprietor of the Firm M/s.RMS and had failed to remit the same to the Government. It is contended that quantification of the amount has been arrived at on the basis of ledgers submitted by the service receivers from the Firm. It is contended that to safeguard the Government revenue, recovery proceedings in terms of Section 87 of the Finance Act, 1994 and Rule 6(1) of Service Tax Rules, 1994 came to be initiated and amount of Rs. 39,96,157/- has been recovered towards service tax and interest liability of M/s. RMS amounting to Rs. 47,50,000/-. It is also stated that fifth respondent-Union Bank of India, Hunnur Branch, has paid the amount which was in the current Account of the Firm. Respondents have further contended that M/s, RMS failed to respond to the letters and summons issued since 06.07.2011....
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....(28) ELT 53 (SC); GOKAK PATEL VOLKART LTD VS. CCE 4) 1991 (55) ELT 295: DAVANAGERE COTTON MILLS LTD VS. CHAIRMAN, CBEC. 5) 2013 31 STR 515 (MAD)CHITRA BUILDERS P. LTD VS. ADDL COMMR. OF C, C.E. & S.T., COIMBATORE. 8. Per contra, Sri N.R. Bhaskar, learned panel counsel appearing for respondents 2 and 4 whose action have been called in question in this writ petition would defend the recoveries already made and contends that in order to safeguard the interest of revenue, the admitted service tax which had been collected by the proprietor of the Firm M/s. RMS namely, husband of the petitioner which had not been remitted to the Government as required under the Finance Act, 1994 had resulted in investigation being conducted and after verification of the invoices and ledgers submitted by the service receivers, quantification has been done and as such the amounts have been recovered which is in consonance with the provisions of Finance Act, 1994 and particularly Section 87 and there is no infirmity what so ever committed by the respondents as such he prays for dismissal of the writ petition. 9. Having heard the learned advocates appearing for the parties and on perusal of the case pape....
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.... the proviso to sub-section (1) by the Central Excise Officer, such person or agent may pay service tax in full or in part as may be accepted by him, and the interest payable thereon under Section 75 and penalty equal to twenty-five per cent of the service tax specified in the notice or the service tax so accepted by such person within thirty days of the receipt of the notice.] (2) The [Central Excise Officer] shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of service tax due from, or erroneously refunded to, such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined: PROVIDED that where such person has paid the service tax in full together with interest and penalty under sub-section (1A), the proceedings in respect of such person and other persons to whom notices are served under sub-section (1) shall be deemed to be concluded: PROVIDED FURTHER that where such person has paid service tax in part along with interest and penalty under sub-section (1A), the Central Excise Officer shall determine the amount of service....
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....his Chapter, a periodical return, showing particulars of service tax paid during the period to which the said return relates, is to be filed by an assessee, the date on which such return is so filed; (b) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (c) in any other case, the date on which the service tax is to be paid under this Chapter or the rules made there under; (ii) in a case where the service tax is provisionally assessed under this Chapter or the rules made there under, the date of adjustment of the service tax after the final assessment thereof; (iii) in a case where any sum, relating to service tax, has erroneously been refunded, the date of such refund. [87. Recovery of any amount due to Central Government - Where any amount payable by person to the credit of the Central Government under any of the provisions of this Chapter or of the rules made thereunder is not paid, the Central Excise Officer shall proceed to recover the amount by one or more of the modes mentioned below:- (a) the Central Excise Officer may deduct or may require any other Central Excise Officer or any officer of custom....
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.... or resides or carries on his business and the said Collector, on receipt of such certificate, shall proceed to recover from such person the amount specified thereunder as if it were an arrear of land revenue.] 10. A perusal of Section 70 of the Finance Act would indicate that every person liable to pay service tax is required to assess the tax himself due on the services provided by him and is required to furnish to the jurisdictional Superintendent, written in such form and such manner with a late fee if necessary for delayed furnishing of the returns. Section 71 provide for scheme of submission of return through Service Tax Return preparer. Section 72 enables the Central Excise Officer to pass best judgment assessment. Section 73 of the Finance Act enables the jurisdictional Central Excise Officer to demand from the service providers to call upon such service provider to pay such tax where it has not been paid, levied or has been short levied or short paid or erroneously refunded Sections 75 and 76 enables the Jurisdictional Central Excise Officer to impose interest and penalty for non-payment of such amounts. 11. In the aforestated analysis, case on hand is to be examined. It....
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....ntral Government either forthwith upon the money becoming due or being held or had or within the time specified in the notice as is sufficient to pay the amount due from such person. At this stage, the question that would arise for consideration is whether such notice could have been issued by the fourth respondent even before show cause notices were adjudicated or not. 15. Co-ordinate Bench of this court had an occasion to consider similar issue in the matter of GSP Infratech Development Ltd., Vs. Union of India and Others in W.P.Nos.13781 & 14061/2013 (T-TAR) and held that Section 87 applies only after a proceeding under Section 73 is concluded by an order determining the amount due and payable by the petitioner. In the facts obtained in the said case it came to be held that such a situation had not arisen and there is no conclusion of the proceedings and as such Section 87 was held to be inapplicable. It has been held as under:- "4 - Regarding being had to Section 73(1) of the Act, whereunder show cause notice, Annexure-A was issued to the petitioner, responded by the explanation Anenxure-B, and no order having been passed thereon to conclude the proceeding as required by sub-....
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....is also not in dispute that show cause notice dated 22.04.2015 under Section 73 had been issued to M/s. Rapid Marine Suppliers, A perusal of the said show cause notice which is appended to the statement of objections filed by respondents would clearly indicate that even earlier show cause notice dated 05.08,2009 demanding service tax of Rs. 71,48,987/- payable for the period 2004-05 to 2007-08 had been demanded, followed by a further show cause notice dated 19.10,2009 demanding service tax of Rs. 40,27,335/- payable for the period 2008-09 which show cause notices were undisputedly pending adjudication even as on the date of issuance of the show cause notice dated 22.04.2015 referred to herein supra. Even without abovesaid two show cause notices being adjudicated, third show cause notice dated 22.04.2015 came to be issued demanding service tax, interest thereon and proposed to levy penalty which is also yet to be adjudicated. In other words, there is no determination or quantification of the amount due and payable by M/s. RMS. As such the recovery notices issued by respondent No.4 dated 12.03.2015/16.03.2015 Annexure-L, N, P and R would amount to putting the horse before the cart or....
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....due from the service provider and not prior to that. The scheme of the Finance Act in general and Section 73C in particular, would clearly indicate that the authorities in order to protect the interest of the revenue can provisionally attach any property belonging to the person on whom notice is served under sub-section (1) of Section 73 or sub-section (3) of Section 73A as the case may be, during the pendency of any proceedings under Section 73. Undisputedly, in the instant case, show cause notices dated 05.08.2009, 19.10.2009 and 22.04.2015 having been issued to the service provider, has not yet been adjudicated and as such, respondents-2 to 4 could not have taken recourse to invoke Section 87 for recovering the amounts due from the service provider by issuance of garnishee notices to respondents-5 to 8. 20. Though the respondents have sought to defend such action on the ground that these amounts had been collected by the service provider and same had not been remitted to the department or to the account of the Central Government, the course left open to respondents-2 to 4 is as provided under Section 73(1) namely, adjudicating the show cause notices and thereafter on such adjud....