IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 07.01.2010 CORAM: THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P.No. 20255 of 2009 and W.P.M.P.No.1 of 2009 M/s Creative Infospace Pvt. Ltd., Represented by its Managing Director, Mr.Kadiresan Adityan, 5/5, Blue Beach Road, Neelangarai, Chennai – 600 041. ... Petitioner vs. 1.The Additional Commissioner, Office of the Commissioner of Central Excise, MHU Complex, 692, Anna Salai, Nandanam, Chennai-35. 2.The Superintendent of Service Tax, Group VII, Division IV, MHU Complex, 692, Anna Salai, Nandanam, Chennai-35. ... Respondents PRAYER: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a writ of certiorari to call for all the records of the 1st respondent impugned communication styled as show cause notice No.388/2009 bearing proceedings No.C.No.IV/9/437/2009 STC ADJ dated 17.09.2009 and quash the same. For Petitioner : Mr.S.Thiruvenkataswamy For Respondents : No Appearance O R D E R The prayer in the writ petition is to quash a show cause notice dated 17.09.2009 issued by the first respondent calling upon the petitioner to show cause notice within a period of 30 days as to why service tax should not be demanded for the period from July 04 to February 05 under proviso to section 73(1) of the Finance Act 1994 and as to why interest at applicable rate should not be demanded under section 75 of the Act and penalty under Section 76 and 78 of https://hcservices.ecourts.gov.in/hcservices/ the Act, should not be imposed. This show cause notice is impugned in the present writ petition. Primarily on two grounds the show cause notice is challenged. Firstly, on the ground that it is in violation of principles of natural justice, since, when the second respondent had sent a communication on 21.05.2009 directing the petitioner to submit his reply to audit report, the petitioner promptly responded to the same on 25.06.2009 and without conducting any further enquiry the first respondent has issued the show cause notice. The other ground of attack is that the authority has already predecided the issue and the learned counsel relied upon the findings in paragraph 3 of the show cause notice, and submitted that the tax has already been quantified which shows that the show cause notice is an empty formality. 2.The learned counsel for the petitioner by placing reliance on the decision of the Honourable Supreme Court in Siemens Ltd. Vs. State of Maharastra and others (2006) 12 Supreme Court Cases 33 contended that the writ petition is maintainable against a show cause notice if the respondent has already determined the liability of the appellant. 3.I have perused the show cause notice which is impugned in the writ petition. It has been stated that during the course of the audit of the accounts of the assessee by the officers of the Internal Audit Group of the respondent department, noticed that the assessee has not paid Service Tax for a stated period. Thereafter, the office had directed the assessee to pay the Service Tax, for the said period for which the assessee by letter dated 24.06.2009 denied his liability. These material were placed before the first respondent and the first respondent in the impugned show cause notice has stated that the contention of the assessee appears to be not tenable for certain reasons. Paragraph 3 and 4 of the show cause notice has set out the reasons based on which the first respondent has stated that the prima facie the contention of the petitioner is not tenable. I find that there is no predetermination of the issue or any foregone conclusion arrived at by the first respondent. In paragraph 5, of the show cause notice the petitioner has been given opportunity to submit his explanation to the allegations contained in the show cause notice as well as to the quantum said to have been computed. Further under Section 73 of the Finance Act at is stood prior of its amendment by Finance (No.2) Act, 2004, with effect from 10.09.2004 and subsequently, the officer demanding service tax is required to issue a show cause notice on the person calling upon him to show cause why he should not pay the amount specified in the notice. Therefore, the quantification of the tax in the show cause notice is a statutory requirement and cannot be stated that the authority has predecided the issue. Therefore, the decision relied on by the learned counsel rendered by the Honourable Supreme Court in Siemens Ltd. Vs. State of Maharastra and others (2006) 12 Supreme Court Cases 33 has no application to the facts of the present case. Further the https://hcservices.ecourts.gov.in/hcservices/ question whether the extended period could be invoked or not is also a factual question which should be best left to the adjudicating authority to decide based on the reply to be submitted by the petitioner and the documents, if any, to be produced. This issue, therefore cannot be gone into in a proceeding under Article 226 of the Constitution. 4.Hence, I find that there are no reasons to quash the impugned show cause notice and hence writ petition stands dismissed. However, since the time stipulated in the show cause notice for submitting the reply has already expired, the petitioner is granted 30 days time from the date of receipt of a copy of this order to submit his explanation to the show cause notice and on receipt of the same the first respondent shall adjudicate the case on merits and in accordance with law, after affording opportunity to the petitioner as contemplated under the provisions of the Finance Act. No costs. Consequently, connected miscellaneous petition is closed. Sd/- Asst. Registrar //true copy// Sub Asst.Registrar vsm To 1.The Additional Commissioner, Office of the Commissioner of Central Excise, MHU Complex, 692, Anna Salai, Nandanam, Chennai-35. 2.The Superintendent of Service Tax, Group VII, Division IV, MHU Complex, 692, Anna Salai, Nandanam, Chennai-35. 1 cc to Mr.S.Thiruvenkatasamy, Advocate, Sr.No.1280 W.P.No.20255 of 2009 AKR {CO} TP/22.1.2010. https://hcservices.ecourts.gov.in/hcservices/