IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 16TH JUNE 2011 / 26TH JYAISHTA 1933 WP(C).No. 15848 of 2011(E) -------------------------- PETITIONER(S): ---------------------- M/S.ORIENTAL EXTRACTIONS(P)LTD, DHANWANTHARI BHAVAN,POST BOX NO.4204,NEAR IRON BRIDGE,ALAPPUZHA-688 011,REPRESENTED BY ITS MANAGING DIRECTOR,MR.K.RAMESH. BY ADV. SRI.ANIL D. NAIR SRI.J.R.PREM NAVAZ SMT.NIVEDITA A.KAMATH RESPONDENT(S): ------------------------ 1. THE COMMERCIAL TAX OFFICER,FIRST CIRCLE, ALAPPUZHA. 2. THE COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX,COCHIN COMMISSIONERATE, C.R.BUILDING,I.S.PRESS ROAD,COCHIN-682018. BY GOVERNMENT PLEADER SRI. MMSUDHEEN ADV. SRI.THOMAS MATHEW NELLIMOOTTIL,SC,CB EX FOR R2 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16/06/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX EXHIBIT.P1: TRUE COPY OF THE AGREEMENT BETWEEN THE PETITIONER AND MARIC0 LTD. EXHIBIT.P2: TRUE COPY OF THE AGREEMENT BETWEEN THE PETITIONER AND MARIC0 LTD. EXHIBIT.P3: TRUE COPY OF THE AGREEMENT BETWEEN THE PETITIONER AND MARIC0 LTD. EXHIBIT.P4: TRUE COPY OF THE AGREEMENT BETWEEN THE PETITIONER AND MARIC0 LTD. EXHIBIT.P5: TRUE COPY OF THE PENALTY ORDER ISSUED BY THE INTELLIGENCE OFFICER (IB), COMMERCIAL TAXES, ALAPPUZHA TO THE PETITIONER. EXHIBIT.P6: TRUE COPY OF THE STATEMENT OF THE MANAGING DIRECTOR OF THE PETITIONER PRODUCED BEFORE THE SECOND RESPONDENT. EXHIBIT. P7: TRUE COPY OF THE SHOW CAUSE NOTICE DATED 11.4.2011 NO.62/2011/ST ISSUED TO THE PETITIONER. //TRUE COPY// P.A TO JUDGE C.K.ABDUL REHIM, J ----------------------------------------- W.P.(C). NO.15848 OF 2011 ---------------------------------------- Dated this the 16th day of June, 2011. JUDGMENT Through Ext.P7 notice issued by the second respondent, the petitioner was required to show cause as to why service tax could not be collected on the value received by the petitioner from “intellectual property service,” during the month of January 2006, under Section 73 (1) of the Finance Act 1994 read with Rule 6 of the service tax Rules 1994. By the said notice the petitioner was also required to shaw cause as to why interest and penalty leviable under the relevant provisions also could not be realised. 2. Contention of the petitioner is that the alleged amount is only consideration received with respect to sale of 'trade mark' and the transaction in question was only an assignment of the trade mark 'in perpetuity'. It is further contended that the turn over in this regard has already been assessed by the first respondent under the provisions of the Central Sales Tax Act. Therefore, the petitioner contended that the proceedings initiated for imposing service tax is tally without W.P.(C). NO.15848 OF 2011 2 jurisdiction, 3. On a perusal of Ext.P7, it is evident that the shaw cause notice was issued under the premise that it is only a transfer of the intellectual property rights on a 'temporary' basis and usage of the words “assignment in perpetuity” was incorporated in the documents of transfer only as a ruse to make it appear that the transfer is not on 'temporary' basis. However, on a prima facie consideration, I am of the view that there is no absolute lack of jurisdiction as contended. But on the other hand, the question need be decided is as to whether it is an assignment in 'perpetuity' or it is a 'temporary' assignment of the rights. 4. However, it is noticed that the proceedings is only at the stage of issuing shaw cause notice. The petitioner had already submitted objections to the notice, as evident from Ext.P8. Learned standing counsel appearing for the second respondent submits that, as per the procedure prescribed under the relevant statute, an adjudication has to be conducted by the second respondent. It is contended on behalf of second respondent that it is highly premature for the petitioner to approach this Court to challenge Ext.P7 without there being any W.P.(C). NO.15848 OF 2011 3 adjudication completed. 5. Considering the facts and circumstances as stated above, I am of the view that the petitioner can be permitted to raise all contentions before the adjudicating authority, including the contention regarding lack of jurisdiction. 6. I make it clear that I have not expressed any opinion regarding merits of any of the contentions in this writ petition. Needless to say that the adjudication shall be completed after affording reasonable opportunity to the petitioner to substantiate his case, including an opportunity for personal hearing. It is further made clear that the petitioner will be at liberty to challenge the order of adjudication if he is aggrieved by any decision taken thereof, through appropriate proceedings. Therefore, the writ petition is dismissed without prejudice to pursue the matter before the second respondent. C.K.ABDUL REHIM, JUDGE mns