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
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.
[2020(2) M.P.L.J.]
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
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
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
