Punj Lloyd Ltd. vs Union Of India & Ors.
2018 Latest Caselaw 2518 Del

$~23
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
+                           W.P.(C) 10515/2016
                                     Date of decision: 23rd April, 2018.
        PUNJ LLOYD LTD.                                     ..... Petitioner
                            Through: Mr. Balbir Singh, Sr. Advocate
                            with Mr. Mayank Sapre and Mr. K.
                            Gurumurthy, Advocates.
                versus

        UNION OF INDIA & ORS.                     ..... Respondents
                      Through: Mr. Brajesh Kumar, Sr. Advocate
                      for UOI.
                      Mr. Harpreet Singh, Sr. Standing Counsel
                      with Mr. Suresh Chaudhary, Advocate for
                      R-2 to 4.

        CORAM:
        HON'BLE MR. JUSTICE SANJIV KHANNA
        HON'BLE MR. JUSTICE CHANDER SHEKHAR

SANJIV KHANNA, J. (ORAL)

M/s Punj Lloyd Limited has filed the present writ petition impugning notices dated 11th July, 2016, 5th August, 2016, 29th September, 2016 and 17th October, 2016, issued by the Directorate General of Central Excise Intelligence, Rajkot Regional Unit, Gujarat, as being without jurisdiction and arbitrary.

2. Petitioner submits that earlier investigation and inquiries against the petitioner had resulted in communication/letter dated 19th November, 2014. Petitioner had accepted short payment of service tax

of Rs.20,92,42,010/-, which was voluntarily deposited along with appropriate interest and penalty. Letter dated 19th November, 2014 records that case was concluded under Section 73(4A) of the Finance Act, 1994. Accordingly, the respondent authorities cannot issue the aforesaid summons/notices. Respondent authorities were aware of the Global Settlement Agreement dated 18th April, 2014 between the petitioner and Gujarat State Petroleum Corporation Limited. Drawing our attention to sub-Section (4A) to Section 73 of the Finance Act, 1994, petitioner submits that the said provision overrides and prevails over sub-section (4). Circular No.1053/02/2017-CX dated 10th March, 2017, in paragraph 9.2 states that on conclusion of proceedings in terms of sub-section (4A) to Section 73 of the Finance Act, 1994, an intimation would be sent to the assessee in writing and there would be no need to pass an adjudication order. It is also stated that there would be no need to undertake a review of such conclusion or proceedings. Petitioner relies on the judgment of Supreme Court in Nizam Sugar Factory versus Collector of Central Excise, A.P., 2006 (197) ELT 465 (SC).

3. Learned counsel for the respondent has drawn our attention to the intimation dated 19th November, 2014 and submitted that the letter pertains to non-payment of service tax for Financial Years 2012-13 and 2013-14. It is submitted that the Global Settlement Agreement dated 18th April, 2014 with Gujarat State Petroleum Corporation Limited is after the end of the Financial Year 2013-14. The issues raised are new and distinctly different, and were not a subject matter

of the investigation, resulting in payments and the letter dated 19th November, 2014.

4. Petitioner disputes the factual assertions, and states, payment in terms of the agreement was available with the authorities when intimation dated 19th November, 2014 was issued. The payment made under settlement agreement dated 18th April, 2014 relates to the period covered by Financial Years 2012-13 and 2013-14.

5. Be that as it may, the petitioner is entitled to raise all these contentions and issues in response to the summons/notices, which are in the form of letters calling upon the petitioner to give and file their response. The contentions raised by the petitioner would be examined and considered by the authorities, who have issued the notices. It will be pre mature to interfere and quash the notices or summons, in nature of queries raised. Issue of summons and notices does not mean that the authorities have formed any opinion or decided that show cause notice has to be issued. The queries raised have to be answered and depending upon the explanation given, the authorities would decide whether or not to proceed.

6. Judgment in the case of Nizam Sugar Factory (supra) arises from an appeal filed by the assessee pursuant to issue of show cause notice and an adjudication order passed thereafter. No decision has been cited, where issue of notice raising a query has been struck down.

7. We would hesitate and not act as an authority deciding the notices on facts and merits. Court would normally not act as an inquiry officer

or investigator when power in this regard is conferred on the authorities. The petitioner, we would observe, is entitled to raise the legal contention relying on their interpretation to sub-sections (4) and (4A) of Section 73 of the Finance Act, 1994. The authority would examine factual aspects and legal contention including the question whether conditions of sub-section (4) of Section 73 of the Finance Act, 1994 are satisfied. Presently, no show cause has been issued to the petitioner. Proceedings under sub-section (4) of 73 of the Finance Act have not been initiated.

8. Learned counsel for the respondent has referred to the judgment of the Supreme Court in Commissioner of Customs, Calcutta versus M.M Exports, 2007 (212) E.L.T. 165 (S.C.) which observes that High Courts should not interfere at summons stage except in exceptional cases. The reason being that the department has not decided and taken a firm opinion, whether or not to issue a show cause notice. Reliance is also placed on the judgment of Bombay High Court in ICICI Bank versus Union of India and Another, [2015] 82 VST 280 (Bom).

9. In the present case even show cause notice has not been issued, but queries and questions have been raised, to which answers given by the petitioner would be considered and examined. The general rule is that the Courts should abstain from interference at this stage except when a clear cut case of abuse of process of law is made out and prima facie established by the petitioner. This is not the position in the present case for contentious issues both on facts and legal interpretation of Sub-section (4) and (4A) of Section 73 of the Finance

Act, 1944 arise for consideration. Bypassing the normal and routine procedure would not be proper. We would not like to undertake the task of examining and adjudicating assertions and counter-assertions on merits notwithstanding the fact that the authority itself is to form any opinion and the matter is pending consideration and decision.

10. Counsel for the petitioner, at this stage, submits that the petitioner would depute an authorized representative to answer the queries raised and appear. Counsel for the respondents states that authority would not normally have any objection to appearance by an authorized representative. However, in case any distinct issue and query is required to be answered by a specific person then notices/summons would be issued to the concerned person.

11. Recording the aforesaid, we decline to interfere with the notices/summons issued. We also clarify that we have not expressed any opinion on merits. All issues and contentions raised by the petitioner are left open. No costs.

SANJIV KHANNA, J.

CHANDER SHEKHAR, J.

APRIL 23, 2018 MR/NA