Ramesh Kumar Shrivastava vs. Union Of INDIA

Facts

The petitioner, Ramesh Kumar Shrivastava, received a notice dated December 19, 2020, from the Assistant Commissioner, CGST and Central Excise, Division-I, Bhilai, proposing to recover service tax amounting to Rs. 49,49,344/- for the financial years 2015-16 and 2016-17. The petitioner challenged this notice, contending it was issued with a premeditated mind and violated Section 73 of the Finance Act, 1994, which limits recovery beyond 18 months unless fraud or suppression of facts is established. The petitioner relied on the Supreme Court's decision in Siemens Ltd. Vs. State of Maharashtra. The respondent argued that the notice was a show cause notice to allow the petitioner to explain the receipt of commission for services rendered, and that a previous show cause notice had not been responded to.

Held

The Court held that the statutory authority had not issued the notice with a premeditated mind. The notice dated December 19, 2020, clearly indicated that the petitioner had received amounts for services rendered during 2015-16 and 2016-17 but failed to pay the applicable service tax. The notice also noted the petitioner's failure to provide information or documents regarding the services, leading to a presumption that the services were taxable and not covered by the negative list or exemptions. The notice explicitly mentioned the suppression of facts by the petitioner with the intention to evade service tax. The Court found that Section 73 of the Finance Act, 1994, permits recovery beyond 18 months in cases of suppression of facts. Therefore, the petitioner had a clear opportunity to appear before the Assessing Authority and reply to the notice. The Court concluded that the show cause notice was issued for the petitioner to explain the circumstances, and the issue revolved around the suppression of facts, which the petitioner needed to address before the authority. The petition was dismissed.

Key Issues

1. Whether the show cause notice dated December 19, 2020, issued by the Assistant Commissioner, CGST and Central Excise, Bhilai, proposing recovery of service tax for the financial years 2015-16 and 2016-17, was issued with a premeditated mind, thereby rendering it invalid under Section 73 of the Finance Act, 1994, and the principle laid down in Siemens Ltd. Vs. State of Maharashtra? Petitioner's arguments: The petitioner argued that the notice was issued with a premeditated mind and that recovery beyond 18 months was impermissible under Section 73 of the Finance Act, 1994, unless fraud, collusion, willful misstatement, suppression of fact, or contravention with intent to avoid payment was established. They relied on Siemens Ltd. Vs. State of Maharashtra. Respondent's arguments: The respondent contended that the notice was a show cause notice to allow the petitioner to explain the receipt of commission for services rendered. They stated that the petitioner had not responded to a previous show cause notice, necessitating the issuance of the current one. They referred to Section 65(B)(44) of the Act of 1994.