Bindu Bhusan Banik vs. The Unon Of INDIA And 5 Ors

Held

The Court held that while the petitioner might have a strong defence against the demand, the power to issue the show-cause notice was exercised by the authority as per statutory power conferred under Section 73 of the Finance Act, 1994. The Court cannot presume that the respondent authorities would not consider the petitioner's show-cause reply or the arguments presented during the personal hearing. Therefore, the Court found it in the interest of justice to relegate the petitioner to approach the adjudicating authority who issued the show-cause notice. To protect the petitioner's interest, the Court directed that the petitioner be permitted to file an additional show-cause reply if desired. The adjudicating authority was also directed to provide an opportunity for a personal hearing, either physically or online, or through an authorized representative. The writ petition was disposed of with liberty to the petitioner to appear before the Assistant Commissioner, CGST, Tinsukia Division, by 31.07.2023.

Facts

The petitioner, Bindu Bhusan Banik, proprietor of M/s Bindu Bhusan Banik, a registered contractor involved in works contract, challenged three notices issued by CGST authorities. The primary notice, a Demand-cum-show-cause notice dated 11.02.2019 from the Assistant Commissioner, CGST, Tinsukia Division, demanded Rs. 49,81,930.00. This demand was based on the petitioner's alleged failure to obtain Service Tax registration and submit periodical Service Tax Returns (ST-3) from October 2013 to June 2017. The petitioner contended that no service tax was payable as 'Manpower Supply Services' were in the negative list as per Notification No. 25/2012-ST. The petitioner also cited the prevailing COVID-19 pandemic at the time of receiving the show-cause notice and claimed their reply sent on 28.09.2020 was not considered.

Key Issues

1. Whether the Demand-cum-show-cause notice dated 11.02.2019, issued by the Assistant Commissioner, CGST, Tinsukia Division, is without jurisdiction or arbitrary, thus warranting intervention by the High Court under Article 226 of the Constitution of India? 2. Whether the subsequent notices dated 24.09.2020 and 11.02.2022, issued by the Superintendent (A/E) and Superintendent of CGST, respectively, are legally sustainable? Petitioner's Arguments: The petitioner argued that the demand was improper and arbitrary, as no service tax was due due to the nature of services ('Manpower Supply Services') being in the negative list under Notification No. 25/2012-ST. They also contended that their show-cause reply was not considered, and the issuance of further notices during the COVID-19 pandemic was problematic. The petitioner sought to have the notices quashed directly by the High Court. Revenue's Arguments: The respondents, represented by the learned Standing Counsel, GST department, did not explicitly present arguments on the merits of the petitioner's defence. However, their presence and representation indicated their stance in defending the actions of the revenue authorities.