Om Shiv Associates Vs. Union of India

The petitioner in this case is a Civil Contractor holding Service Tax registration No. AKJPM8743PST001. The petitioner was initially requested on 28/06/2016 to provide specific information regarding the financial year 2013-14, including details about the nature of services provided/received, copies of income tax returns, P&L and Balance Sheet, ST-3 Return, and copies of TR-6/GAR-7 challans relating to payment of Service Tax for that period.

Subsequently, the petitioner received summons on 28/04/2017 under Section 14 of the Central Excise Act, 1944, which was made applicable to Service Tax matters through Section 83 of the Finance Act, 1994. These summons demanded the production of documents and records for both 2013-14 and 2014-15 financial years, including ST-3 returns, income tax returns, Form 26AS, VAT/Sales Tax returns, bank account statements, balance sheets, reconciliation statements, and other related documents.

Despite repeated reminders and summons, the petitioner failed to comply with the requests. Further correspondence dated 30/10/2018 under Section 174 of the Central Goods and Services Tax (CGST) Act, 2017, called upon the petitioner to provide additional documents such as service tax calculation sheets for the financial year 2016-17, balance sheets, form 26AS, work orders/agreements, ST-3 returns, and reconciliation statements for the financial years 2013-14 to 2017-18 (up to June 2017).

Additional reminders were sent on 14/03/2019 and 06/06/2019 under Section 70 of the CGST Act, 2017, read with Section 14 of the Central Excise Act, 1944, and Section 83 of the Finance Act, 1994, read with Section 174 of the CGST Act, 2017. Despite these communications, the petitioner continued to evade responding to the requests.

Instead of complying with the summons and requests for documents, the petitioner insisted on the authorities first making a decision on their application/representation under Section 73 of the Finance Act, 1994, read with Section 73 of the CGST Act, 2017. This section deals with the recovery of service tax not levied or paid, or short-levied or short-paid, or erroneously refunded, along with the determination of tax not paid or short-paid or erroneously refunded, or input tax credit wrongly availed or utilized, for reasons other than fraud, willful misstatement, or suppression of facts.

In summary, the petitioner, a Civil Contractor with Service Tax registration, has repeatedly failed to comply with requests and summons from the authorities to provide essential financial documents and records spanning multiple financial years, despite the potential consequences outlined for non-compliance. Instead, they have insisted on the authorities addressing their application/representation under relevant tax laws. 

The petitioner in this case is seeking the quashing of a notice for personal hearing and is requesting the authorities to decide on his representation before initiating any proceedings. However, the court examines the petitioner’s arguments in light of Section 70 of the Central Goods and Services Tax (CGST) Act, 2017, which grants the proper officer the power to summon individuals for inquiries, similar to procedures followed in civil courts under the Code of Civil Procedure, 1908.

Section 70(2) of the CGST Act deems such inquiries as “judicial proceedings” within the meaning of relevant sections of the Indian Penal Code. Given the prima facie opinion that the petitioner has evaded taxes, the court is not inclined to grant any indulgence. The petitioner’s argument that proceedings under Section 70 can only be initiated after a decision under Section 73 of the Act fails to convince the court.

Consequently, the court refrains from granting any indulgence to the petitioner. As a result, the petition is dismissed without imposing any costs.