M/S SIRI RESTAURANT AND BAR V. The Commissioner of Customs,

WP/29905/2013

AI Insights

The case involves M/s. Siri Restaurant & Bar, Visakhapatnam, challenging the issuance of summons dated 17.9.2013 under Section 14 of the Central Excise Act, 1944, which was perceived as an intention to impose service tax on the provision of air conditioning facilities to customers. The petitioner argued that the summons were illegal, arbitrary, and without power, referencing a judgment from the Kerala High Court which struck down the provision enabling the imposition of such a tax. The court found that the summons did not explicitly state the intention to impose service tax and directed the petitioner to clarify the intention of the authorities by appearing before them.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 695751 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 31-10-2013
• Assessment Year: misc
• Other Referred Cases: South Malabar Trading Company, Vadakkancherry vs. Union of India & others in W.P.(C) No. 15867of 2011 (G)
• Laws Referred To: Central Excise Act, 1944, Finance Act, 1944, Indian Penal Code
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Keywords: Air-conditioning; Evasion of Service Tax; Service tax; Summons; Writ of Mandamus
• Section: 14; 174; 175

Judgement Text

"THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR Writ Petition Nos.29905, 30005 and 30009 of 2013 DATED:31.10.2013 W.P. No. 29905 of 2013 Between: M/s. Siri Restaurant & Bar, Visakhapatnam. … Petitioner And The Commissioner of Customs, Central Excise and Service Tax, Visakhapatnam and another. ….Respondents THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR Writ Petition Nos.29905,30005 and 30009 of 2013 Common Order: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) Since the issue involved in all these three writ petitions being the same, they are disposed of by this common order. In Writ Petition No. 29905 of 2013, the petitioner has prayed for the following relief: “To issue a writ, Order or direction more particularly one in the nature of Writ of Mandamus declaring the action of the respondents in proposing to impose service tax on the petitioner for providing Air Conditioning facility to its customers and issuing summons in C.No. IV/5/119/Bar/Vskp/12/AE.1, dated 17.9.2013 as illegal, arbitrary and without power and set aside the same and consequently direct the respondents not to impose any service tax on the petitioner for providing Air Conditioning facility to its customers and to pass such other order or orders as this Hon’ble Court may deem fit and proper in the circumstances of the case. In order to obtain the above relief, the only material which has been placed before us to demonstrate that action is being taken to impose service tax are summons dated 17.9.2013 issued under Section 14 of the Central Excise Act, 1944 (for short ‘the Act’). Learned counsel for the petitioner drawing our attention to the entire text of the notice submits that this notice has been issued intending to impose Service Tax upon his client. He further submits that in view of the judgment of the Kerala High Court in South Malabar Trading Company, Vadakkancherry vs. Union of India & others in W.P.(C) No. 15867of 2011 (G), the appropriate provision which had hitherto enabled the respondents to impose Service Tax has been struck down. A copy of the said judgment is annexed to the writ petition. On a careful reading of the said summons dated 17.9.2013, it does not appear to us in clear terms that the intention of the authorities is to impose service tax upon the petitioner. We, therefore, set out the entire text of that notice, which reads thus: “C. No. IV/5/119/Bar/Vskp/12/AE-1 Date: 17.9.2013 SUMMONS To Shri D. Kirshna Kishore, Proprietor, M/s. Siri Restaurant & Bar, 10-2-9/1, Rajiv Marg, Siripuram, Visakhapatnam-530003. WHEREAS a case about evasion of Service Tax/Contravention of provisions of the Finance Act,1944 and Rules made thereunder is being inquired by me/under my orders. AND WHEREAS I have reasons to believe that you are in possession of facts or/and documents and things which are relevant to the above inquiry. You are hereby summoned under Section 14 of Central Excise Act, 1944 to appear before me in person on the 01st day of October, 2013 at 1200 hrs at Room No.207, II Floor, NEW CENTRAL EXCISE BUILDING, PORT AREA, VISAKHAPATNAM-530035 to give evidence or to make statement truthfully on such matters concerning the inquiry as you may be asked and to produce the documents and things mentioned in the schedule below, for my examination. If you fail to obey this summons and intentionally omit to attend to give evidence to make statements you will be liable to be punished under the provisions of Sections 174 and 175 of Indian Penal Code. SCHEDULE i) Month-wise sales of alcoholic liquor and purchase details/ledger for the period 2011-12 & 2012-2013 (till date). ii) Month-wise sales of food & cool drinks and purchase details/ledger for the period 2011-12 & 2012-2013 (till date). iii) Balance sheet/Profit & Loss A/c for the period 2011-12 and Trial Balance/Profit & Loss A/c for the period 2012-13. iv) ST-3 returns filed, if any, for the period 2011-12 & 2012-13. v) Sales Tax/VAT returns filed for the period 2011-12 & 2012- 13. vi) Income Tax Returns filed for the F.Y. 2011-12. vii) Statement regarding number of Air-conditioners installed in the premises. viii) Bank account statement of the licence/firm from 1.5.2011 to till date. ix) Electricity bills from 01.05.2011 to till date.” It is merely a summons issued to the petitioner alleging a case about evasion of service tax/contravention of provisions of the Finance Act, 1944. It does not specifically say that who is evader and against whom the proceedings have to be initiated. The learned counsel for the petitioner assumes that since copy of the summons have been issued to his client for production of documents and therefore, it must be presumed that proceedings are intended to be initiated against the petitioner for imposition of tax. We are unable to accept this presumption and assumption. We have to go by what is there on record. Further Section 14 of the Act very clearly says that “summons can be issued to any person either prospective assessee or a third party”. If we read the language employed in Section 14 of the Act, then we can have a presumption without any doubt that the authorities have only issued summons intending to enquire into alleged evasion. Therefore, the petitioner will appear before the authority concerned to know what is the real intention of the issuing authority vis-à-vis its nexus and if the real intention of the issuing authority is to proceed against the petitioner as a proposed assessee or payee of evaded tax, obviously at that stage, the aforesaid judgment of the Kerala High Court would be absolutely relevant. Therefore, we think that at this stage, the petitioner shall go to the Officer concerned, who has issued the summons. The aforesaid judgment of the Kerala High Court shall also be placed by the petitioner before the Officer concerned, who must see the said judgment and take note of it and follow the same without any demur. This exercise shall be completed within a period of four weeks from the date of communication of the order. Till such date, no coercive measures shall be taken by the respondent-authorities. Writ Petition No. 29905 of 2013 is accordingly disposed of. Now, coming to the other writ petitions, namely, Writ Petition Nos. 30005 and 30009 of 2013 are concerned, in view of the judgment rendered by us in Writ Petition No. 29905 of 2013, we do not want to write a separate judgment in these writ petitions and we follow the same judgment, as the issues on fact and law are identical. Writ Petition Nos. 30005 and 30009 are accordingly disposed of in terms of the judgment rendered in Writ Petition No.29905 of 2013. Consequently, the miscellaneous applications, if any pending, shall also stand disposed of. __________________ K.J. SENGUPTA, CJ _________________ SANJAY KUMAR, J 31.10.2013 PNB` "