ABP PRIVATE LIMITED Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) In the writ petition petitioner No. 1, stated to be a leading public house in the country and, inter alia, engaged in the business of printing and publishing a wide range of newspapers and periodicals and petitioner No. 2, a citizen of India and shareholder of petitioner No. 1, have challenged the notice dated 1st/4th December, 2006 (for short, "the notice") issued by the Assistant Commissioner (S.I.V.), Service Tax, Kolkata, respondent No. 2, requesting petitioner No. 1 to furnish certain documents mentioned therein with regard to the information regarding taxability of its activity under the category of business auxiliary service (for short, "the BAS") under the Finance Act, 1994. It may be noted that provisions for service tax have been made in Sections 64 to 96-I (Chapters V and VA) of the Finance Act, 1994. In the writ petition it has been stated that petitioner No. 1, registered under the service tax with regard to eight activities, have been regularly filing service tax returns and paying tax thereto. According to the petitioner, in view of several exemptions granted by notifications and circulars, the commercial activity of printing, publishing and selling newspapers and periodicals and selling of advertisement space in print media does not fall under the category of BAS. It has been stated that the impugned notice is based on suspicion as it has been mentioned that the commercial activities may fall under category of BAS. Since the entire nature of commercial activities is known to the service tax authorities as apparent from the notice itself and from the returns filed, and since such commercial activities do not fall under the category of BAS, the documents sought for are not relevant. Moreover, the notice impugned is vague and thus the inquiry is fishing and roving in nature.

(2.) The learned senior advocate appearing on behalf of the petitioner relying on the statements in the writ petition submitted that since in the affidavit-in-opposition it has been stated that the authorities have reasons to believe that the petitioner is carrying on BAS activities, the respondents ought to have disclosed what had prompted them to issue such notice. Submission is that the letter dated 20th December, 2006 sent on behalf of petitioner No. 1 in reply to the notice does not preclude the petitioner from challenging the same. The learned senior advocate for the petitioner had relied on several judgements which shall be dealt with in appropriate stage.

(3.) The learned advocate for the respondents justifying the action has submitted that Section 83 of the Finance Act, 1994 read with Section 14 of the Central Excise Act, 1944 (for short, "the Central Excise Act") authorise the respondent to issue such notice. Since the Finance Act, 1994 is a special Act and the Section 14 of the Central Excise Act does not contain the words "reason to believe", the judgments relied on by the petitioner are not applicable to the facts of the case. Moreover, the instant writ petition is not maintainable since it is evident from the reply dated December 20, 2006 that petitioner No. 1 had submitted to the jurisdiction of the authority as it had understood the purport of the notice and request was made to grant time for compliance.