Telangana High Court
M/S. Geetha Computerised Colour Lab, ... vs The Superintendent Of Customs, Khammam ... on 13 June, 2024
THE HONOURABLE SRI JUSTICE SUJOY PAUL
AND
THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO
WRIT PETITION No.16866 of 2006
ORDER:
(per Hon'ble Sri Justice Sujoy Paul) Sri J.V. Rao, learned counsel, appears for the petitioner; Sri Dominic Fernandes, learned Senior Standing Counsel for CBIC, appears for respondent No. 2; and Sri M.V.J.K. Kumar, learned Senior Standing Counsel for CEC Service Tax, appears for respondent No. 4.
2. With the consent, finally heard.
3. This petition, filed under Article 226 of the Constitution of India, takes exception to the letter dated 18.07.2006 (Annexure- P.3) whereby the respondents have requested the petitioner to pay the Service Tax payable to the tune of Rs.2,43,386/-.
4. Learned counsel for the petitioner submits that before passing the impugned order dated 18.07.2006, no notice was issued to the petitioner enabling it to file a detailed reply. Apart from this, the point is squarely covered by a Division Bench judgment of Madhya Pradesh High Court in Agrawal Colour Advance Photo System v. Commissioner of Central Excise 2 and Another 1. It is submitted that the nature of activity of present petitioner and the petitioner before the Madhya Pradesh High Court is same and therefore, the said judgment is squarely applicable in the instant case.
5. Faced with this, Sri Dominic Fernandes, learned Senior Standing Counsel for CBIC, submits that a plain reading of Section 73(3) of Finance Act, 1994 shows that at the stage the letter dated 18.07.2006 was issued, no pre show cause notice was required to be issued. The stage of show cause notice is subsequent to the stage in which letter dated 18.07.2006 was issued. During the course of hearing, Sri Dominic Fernandes fairly admitted that the point involved regarding the taxability is covered by the decision in Agrawal Colour Advance Photo System (supra). However, it is submitted that what is required to be seen is whether the value of material consumed is reflected by invoices and other documents. Unless the same is scrutinized and determined, the petitioner cannot take benefit of the judgment in Agrawal Colour Advance Photo System (supra). It is further submitted that the petition is, in fact, premature and the Court should not have interfered at the stage of admission.
1 [2020(2) M.P.L.J.] 3
6. Learned counsel for the petitioner submits that a careful reading of letter dated 18.07.2006 shows that the value of material consumed is "worked out" by the respondents which shows that they must have examined all the relevant documents before determination of the "value of material consumed". It is submitted that the instant petition is pending since 2006. The person, who was keeping the record, is no more. It is difficult for the petitioner as well as for the Department to trace the relevant record for any further scrutiny. Thus, value of material consumed and determined in the letter dated 18.07.2006 may be treated as final. Since the matter is covered on merits by the judgment of Agrawal Colour Advance Photo System (supra), the impugned order may be set aside.
7. No other point is pressed by counsel for the parties.
8. We have heard the learned counsel for the parties at length and perused the record.
9. At the outset, it can be noted that both the learned counsel for the parties fairly admitted that, so far, the question of imposition of Service Tax, regarding photography service is concerned, the Madhya Pradesh High Court has drawn the 4 curtains on this aspect. Thus, the question of taxability has been finally decided and there is no quarrel between the parties on this aspect. The point, on which both the learned counsel for the parties are at loggerheads, is that whether this matter should go back to the authorities for examining the value of material consumed on the basis of invoices and other documents. In ordinary course, we would have agreed with the contention of Sri Dominic Fernandes. However, this matter is pending since 2006 and we find substance in the argument of learned counsel for the petitioner that it cannot be expected either from the petitioner or from the Department to lay their hands on the very old documents of the years prior to 2006. Apart from this, the document dated 18.07.2006 (Annexure-P.3) shows that the tax liability is "worked out" by the Department. Although Sri Dominic Fernandes stated that said exercise of "working out" is based on petitioner's letter dated 24.05.2006, we are not inclined to deal with this aspect any further because once the exercise of "worked out" is carried out, it is presumed that said exercise must be based on all relevant documents. In the peculiar facts and circumstances of this case and more particularly, the fact that it is not possible because of afflux of time to trace the invoices etc., we are inclined to accept the value 5 of 'material consumed' as mentioned in the impugned order dated 18.07.2006. Thus, in the peculiar facts of this case, we are not inclined to relegate the matter for scrutiny of invoices and other relevant documents. That course may be open to other cases where time gap is not enormous.
10. Thus, in view of judgment of Madhya Pradesh High Court in Agrawal Colour Advance Photo System (supra), we deem it proper to set aside the order dated 18.07.2006. In case the petitioner has already deposited any amount pursuant to interim order passed in this case, if the petitioner prefers an application, the said amount be returned to the petitioner within ninety days from the date of such application.
11. The Writ Petition is disposed of accordingly. No costs.
Interlocutory applications, if any pending, shall also stand closed.
_______________________ JUSTICE SUJOY PAUL ___________________________________________ JUSTICE NAMAVARAPU RAJESHWAR RAO 13th June, 2024 Tsr/Myk