Show Cause Notice U/s 37C Of Central Excise Act Issued At Wrong Address Cannot Be Proceeded: Gauhati High Court
The Gauhati High Court recently held that the recourse to Sub-Clauses (b) & (c) of Clause 37C (1) of the Central Excise Act, is not permitted if the show cause notice was not sent at the proper address of the registered taxpayer.The High Court also clarified that Sub-Clause (b) and Sub-Clause (c) of Section 37(C)(1) of the Act of 1944 can only be pressed into service, if the service of...
The Gauhati High Court recently held that the recourse to Sub-Clauses (b) & (c) of Clause 37C (1) of the Central Excise Act, is not permitted if the show cause notice was not sent at the proper address of the registered taxpayer.
The High Court also clarified that Sub-Clause (b) and Sub-Clause (c) of Section 37(C)(1) of the Act of 1944 can only be pressed into service, if the service of notice under Sub-Clause (a) cannot be affected.
As per Section 37C of the Central Excise Act, 1944, any decision or order passed, or any summons or notices issued under the Act of 1944 or the Rules made thereinunder shall be served in terms which sub-clause (a) by tendering the decision, order, summons or notice, or sending it, by registered post with acknowledgment due or by speed post with proof of delivery or by courier approved by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963, to the person for whom it is intended or his authorized agent, if any.
Single Bench of Justice Devashis Baruah observed that “taking into account that the petitioner does not hold any registration under the Finance Act of 1994, and the registration under the CGST Act of 2017 have no relevance, this Court is of the opinion that the issue pertaining to territorial jurisdiction should be decided by the respondent No.2, provided the respondent No.2 decide to issue a fresh show cause notice to the petitioner at his proper address”. (Para 20)
Facts of the case
The petitioner/ assessee is the proprietor of a firm, and as per the GST registration certificate, the petitioner's proprietorship firm namely, M/s. M.T Enterprise have only one place of business in the State of Arunachal Pradesh. As per Form 26AS, the petitioner's address was Sagalee, Arunachal Pradesh, and the jurisdictional office under the CGST Act, is in Naharlagun. The petitioner was issued a GST communication on Lakhimpur address Range, but the show cause notice was returned undelivered from the address of the noticee i.e. the petitioner. Assuming that the notice was duly issued and the petitioner despite of repeated opportunities being given did not avail the same, the respondent passed an order. Hence, the petitioner approached the High Court.
Observation of the High Court
From the narrated facts, the Bench found that there is no material by the respondents to show that the petitioner has any place of business at Lakhimpur, as the CGST registration of the petitioner categorically establishes that the petitioner's place of business is at Naharlagun, Arunachal Pradesh.
Even the Permanent Account Number (PAN) of the petitioner provided under the Income Tax Act also shows that the address of the petitioner is at Papum Pare district in Arunachal Pradesh, added the Bench.
The Bench observed that the addresses mentioned in those notices were at Lakhimpur and the petitioner had also stated on oath that the said address is not the address of the petitioner and there is no denial to the same by the respondent authorities. I
Referring to Section 37C of the Act of 1944 which postulates the manner in which service of decisions, orders or summons, etc., are to be effected, the Bench pointed out that Sub- Clause (a) of Section 37C(1) of the Act of 1944 could not be said to have been complied with if the decision, order, summons or notice has been sent not to the proper address.
Therefore, finding that there were no materials to show that the petitioner had/has any office at the place where the show cause notice was addressed, the High Court opined that recourse to Sub-Clauses (b) & (c) of Clause 37C (1) of the Act of 1944 violates the principles of natural justice which is a facet of Article 14 and 21 of the Constitution.
Further, the Bench noticed that the petitioner did not register himself or for that matter do not have a registration under the Finance Act, 1994.
Thus, the question whether the petitioner had carried out any activities liable for payment of service tax within the jurisdiction of the second respondent is a question of fact which can be very well adjudicated upon by the jurisdictional Officer, added the Bench.
Finally, the High Court remanded the issue pertaining to territorial jurisdiction to be decided by the second respondent after issuing fresh show cause notice to the petitioner at his proper address.
Counsel for Petitioner/ Assessee: AK Jain and BJ Das
Counsel for Respondent/ Revenue: SC Keyal
Case Title: Abraham Kaya Techi versus Union of India and anr
Case Number: WP(C)/1333/2023