TaxTMI 
TaxTMI 
2021 (7) TMI 1064
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....ecord. 3. The petitioner No.1 is a partnership firm engaged in the business of purchase and sale of various textile machineries. The petitioner firm was registered under the erstwhile Sales Tax Regime, and now is also holding a valid and subsisting registration under the present GST Regime. The petitioner firm is holding the Service Tax Registration under the category of business auxiliary services and repair and maintenance services. In and around the year 2009, the petitioner firm had entered into an agreement with M/s.Arvind Limited for lease and demise of various machineries for a period of 8 years in consideration of rental payment by M/s.Arvind Limited. In terms of the said agreement exclusive right of possession and use was conferred upon the lessee with an option to purchase the said machines upon the conclusion of the said agreement. According to the petitioners, in terms of the provisions of the Central Sales Tax Act, 1965 read with Gujarat Value Added Tax Act, 2003, such transaction was to be treated in the nature of deemed sales and accordingly on the amount received under the said agreement, appropriate VAT/sales tax was discharged to the Government. Appropriate retur....
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....s mandate a preshow- cause notice consultation before the issuance of show-cause notice, in order to promote voluntary compliance and to reduce the necessity of issuing show-cause notice, however, an illusory pre-show-cause notice was issued on 12.4.2019, delivering the same to the petitioner at 13.55 hours, calling upon the petitioner to remain present before the respondent No.2 at 16.00 hours for the pre-show-cause notice consultation. Mr.Gupta submitted that the petitioners requested the respondents to provide reasonable opportunity for effective pre-showcause notice consultation as the time granted to the petitioner was too short, the respondent No.2 issued the show-cause notice on the same day on 12.4.2019. According to Mr.Gupta, such a conduct on the part of the respondent authority was not only arbitrary, high-handed and unjust, but in blatant violation of mandatory procedure and pre-condition prescribed by the Board for pre-show-cause notice consultation. He has placed reliance upon the decision of the Supreme Court in case of Paper Products Limited Vs. Commissioner of Central Excise, reported in 1999(112) ELT 765 (SC) and in case of Ranadey Micronutrients Vs. Collector of ....
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....s have basically challenged the impugned show-cause notice dated 12.4.2019 on the ground of being violative of the master Circular dated 10.3.2017 issued by the Board (Annexure-E). The short question, therefore, that falls for consideration before the Court is, whether the pre-show-cause notice consultation dated 12.4.2019 (Annexure-D) calling upon the petitioners at 13.55 hours to remain present before the respondent No.2 at 16.00 hours on the same day, could be said to be an illusory or an eye-wash notice only with a view to show the compliance of the Circular dated 10.3.2017 issued by the Board ? 7. At the outset, it may be noted that as per the settled legal position, the Circulars issued by the Board are binding to and have to be adhered to by the respondent authorities. The Board had earlier issued circulars and instructions on the show-cause notices and issued the master circular dated 10.3.2017 (Annexure-E) consolidating the earlier circulars to ensure clarity and ease of reference. It has been mentioned in the said master circular that the said circular was issued as an effort to compile relevant legal and statutory provisions, circulars of the past and to rescind the cir....
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.....2014 and the demand for the recovery of service tax could be made within the period of five years, which was to expire on 15.4.2019, the Court does not find any substance in the same. It was the respondent authorities who had not issued the pre-show-cause notice for consultation immediately after the final audit report issued on 28.2.2019, and they waited till the last date on 12.4.2019, knowing fully well that the period of five years was to expire on 15.4.2019. If the respondents did not take any steps on time, and issued the pre-show-cause notice for consultation on the last date as an eye-wash, it could not be said that the petitioner assessee had requested for time to prevent the respondent authorities from making demand of the service tax, which was to expire on 15.4.2019. Such a pre-consultation notice and the impugned show-cause notice issued on 12.4.2019, being in contravention of the circular dated 10.3.2017 issued by the Board, the same cannot be sustained and deserve to be quashed and set aside. 10. It is required to be noted that as such the demand made in the impugned show-cause notice was within the prescribed time limit. Now, since the said notice is sought to be ....