TECHNOMAINT CONTACTORS LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) Heard learned counsel for the parties for final disposal of the petition. Petitioners have challenged the action of the respondents in seeking recovery of service tax dues of the petitioners on the ground that show cause notice proceedings for recovery are pending and the petitioners have several disputes to such recoveries being made as per the show cause notice.

(2.) The petitioners are in the business of construction and are subjected to service tax regime. To the various services provided by them to the customers, they are required to recover and deposit with the respondents the service tax at the rates prescribed. It appears that in an investigation proceedings initiated by the respondents, it came to the light of the respondents that the petitioners had not deposited such service tax regularly in the last couple of years. Detailed statement of the representative of the petitioners were recorded. In one of the statements made by Shri Alok Kumar Ashutosh, Managing Director of petitioner No. 1 company, he admitted irregular service tax payments. In some cases, service tax was collected from the customers, but not deposited with the department. In some other cases, service lax was not received though required to be collected. Be that as it may, on the basis of the investigation carried out, the competent authority issued a show cause notice dated 23.10.2013, calling upon the petitioners why service tax of Rs. 1,86,94,281 be not recovered with interest and penalties under sections 76 and 78 of the Finance Act, 1994 be not imposed. The grievance of the petitioners is that even before the issuance of the show cause notice, the department had issued notices for recovery. On 25.10.2013, barely two days after the show cause notice, the department wrote two separate letters to M/s. Reliance Industries Limited and M/s. Essar Oil Limited, both service recipients from the petitioners calling upon them to deposit a sum of Rs. 50 lakhs and Rs. 40,99,114/- respectively since the petitioners had defaulted in making payment of service tax.

(3.) The case of the petitioners is that they had in instalments already deposited service tax due of Rs. 1,16,86,377/- by then. Rest of the amounts of recoveries were highly disputed. No recovery, therefore, could have been made, that too before full adjudication of the show cause notice.