PRASHANTHI Vs. THE UNION OF INDIA AND ORS.

JUDGEMENT

(1.) Petitioner is seeking for the following reliefs;

(2.) Facts in brief which has led to filing of this writ petition can by crystallized as under; Petitioner is wife of Late. Sri.P.S.Harsha, who was the Proprietor of M/s. Rapid Marine Suppliers, Mangalore, (for short, 'M/s.RMS'), and said Firm which was a proprietary concern was registered with the Service Tax Department under section 69 of the Finance Act, 1994, under the category of "Port services" and "Supply of Tangible Goods for use Service". The said Sri. P.S. Harsha namely, petitioner's husband is stated to have expired on 05.01.2015 leaving behind the petitioner and two children to succeed to his estate. On the death of her husband, petitioner is said to have approached the bank which her husband was conducting business, namely, the fifth respondent to claim the amount available in the Savings Bank Account as well as Current Account of the deceased as well as Firm. It is contended by the petitioner that officers of respondents 2 to 4 had entered the business premises of the Firm belonging to her husband on 11.03.2015 at 5.54 PM and searched the said premises and sought for certain details. According to petitioner, her father expired on 12.03.2015 and as such she was seeking time to furnish the details sought for by the respondents 2 to 4. However, on 12.03.2015, respondent No.4 is said to have issued a letter to respondent No.6 calling for certain particulars and also intimating respondent No.6 by communication dated 12.03.2015 Annexure-K to divert amounts outstanding in the petitioner's husband account by drawing a demand draft in favour of third respondent. A recovery notice under Section 87 of the Finance Act, 1994 also came to be issued by fourth respondent to sixth respondent calling upon them to divert the funds which is outstanding in the account of petitioner's husband. Likewise, fourth respondent is stated to have dispatched/ issued communications and recovery notices to seventh respondent as per Annexures M and N, as also to eighth respondent as per Annexure-P. Fourth respondent has also issued a letter dated 16.03.2015 Annexure-R to fifth respondent directing that the amount in the credit of the Firm M/s. RMS be paid to third respondent. Questioning the action of issuance of recovery notices and contending interalia that without there being any adjudication under Section 73 of the Finance Act, 1994 recovery notices under Section 87 of the Finance Act could not have been issued petitioners are before this court.

(3.) Respondents on being put on notice have entered appearance, filed their statement of objections defending the action of the respondents 1 to 4 by contending interalia that Firm M/s.RMS which was a proprietary concern of deceased Sri.P.S.Harsha namely the husband of the petitioner had failed to pay service tax of Rs.36,48,659/- and interest on the same would amount to Rs.10,81,000/- for the period 01.10.2009 to 30.09.2014 and he had also failed to file the statutory returns. It is also contended that out of the said amount, a sum of Rs.24,98,451/- had been collected from the customers by the proprietor of the Firm M/s.RMS and had failed to remit the same to the Government. It is contended that quantification of the amount has been arrived at on the basis of ledgers submitted by the service receivers from the Firm. It is contended that to safeguard the Government revenue, recovery proceedings in terms of Section 87 of the Finance Act, 1994 and Rule 6(1) of Service Tax Rules, 1994 came to be initiated and amount of Rs.39,96,157/- has been recovered towards service tax and interest liability of M/s. RMS amounting to Rs.47,50,000/-. It is also stated that fifth respondent- Union Bank of India, Hunnur Branch, has paid the amount which was in the current Account of the Firm. Respondents have further contended that M/s. RMS failed to respond to the letters and summons issued since 06.07.2011 till April 2015 and investigation has been concluded on the basis of documents furnished by the service receivers of petitioner, as such, show cause notice has been issued on 22.04.2015 and it is at the stage of adjudication and there is no impediment for the petitioner to appear in the said proceedings. The petition averments have been traversed in the statement of objections and except to the extent expressly admitted in the statement of objections, all other averments made in the writ petition has been denied. Respondents have sought for dismissal of the writ petition.