CBIC Circular clarifying Pre-SCN Consultation Norms on Service Tax has no Retrospective Effect: Gauhati HC [Read Order]

The Gauhati High Court has held that a circular issued by the Central Board of Indirect Taxes and Customs (CBIC) clarifying the rules for pre-show cause notice consultation which only clarifies the CBIC's original instructions and does not bring anything new is clarificatory in nature and operates retrospectively.

Justice Devashis Baruah was considering a petition by the assessee Sanjib Das, who is in the business of executing work contracts with Public Sector Undertakings. A Demand-cum-Show Cause Notice was issued to the assessee under Section 73 (1) of the Finance Act, 1994, alleging that the assessee had rendered taxable services amounting to a certain value on which the assessee had failed to pay service tax. The Demand-cum-Show Cause Notice also sought to levy interest and penalty on the assessee under the Finance Act, 1994 for non-payment and short payment of service tax.

The petitioner contended that it would be difficult for the petitioner for doing the hearing before the authority at Aizawl. It was submitted that vide communication dated 23.03.2022, the petitioner was informed that he may appear for personal hearing either online or physical in person or through his authorized representative. The fixing of the adjudicating authority is on account of administrative exigencies. The petitioner has been permitted either to appear in person or carry out the hearing online.

The Court, while observing that no interference is called for to the said Corrigendum, said, “considering the above and taking into consideration that the petitioner has approached this Court and the matter has been pending adjudication, this Court deems it proper to permit the petitioner to submit his show cause reply within a period of 30 (thirty) days from the date of this judgment before the adjudicating authority as mentioned in the Corrigendum dated 21.02.2022. Upon furnishing the said show cause reply, the respondent adjudicating authority, i.e., the respondent No. 5 is directed to offer the petitioner an opportunity of hearing either online or physically in person or through the authorized representative.”

To Read the full text of the Order CLICK HERE

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