Jurisprudentiol Tuesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Non-furnishing of relied upon documents is negligence on part of adjudicating authority and violation of principles of natural justice: HC

THE case in hand may disclose collusion, or to put it politely, negligence on the part of certain officers. It is rather surprising that an officer of the rank of Additional Commissioner, was not aware that he is required to append all relevant documents with the show cause notice, and if not appended, to provide copies to the noticee within reasonable time, before proceeding to adjudicate the show cause notice. Admittedly, documents were not supplied to the respondent. The negligence does not end here. The appellate authority granted time to the Department to furnish documents to the respondent so that it could reply to the show cause notice but this opportunity also did not elicit any response, compelling the appellate authority to reverse the order passed by the Adjudicating Officer for violation of principles of natural justice.

Income Tax

Whether when AO did not allow adjustment of cash seized against advance tax liability even after assessee making specific request, interest u/s 234B is leviable and assessee cannot escape penalty u/s 271AAA - ruled in favour of assessee: ITAT

ASSESSEE disclosed a sum of Rs. 10 crores during search u/s 132(4) and disclosed in the return of income filed. AO observed that assessee had not paid taxes due on undisclosed income. Assessee contended that default in payment of taxes was due to non acceptance of request of the assessee made before AO to adjust the cash seized against the advance tax liability. Because of non adjustment of seized cash, interest u/s 234B/234C was levied which led to short payment of due taxes and in turn to avail of immunity from penalty proceedings u/s 132(4). AO contended that as per section 132B seized cash could not be adjusted against advance tax liability as the same was not in the nature of ‘existing liability' and proceeded to impose penalty u/s 271AAA. AO further contended that the amount lying in P.D. account could not be treated as payment either on account of self-assessment tax or advance tax.

Service Tax

Sending show-cause notice through courier is not an approved mode of service envisaged under Section 37C of Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 - clear violation of principles of natural justice - Matter remanded to adjudicating authority for service of SCN afresh to appellant and thereafter matter to be adjudicated: CESTAT

FROM the records, it is evident that the show-cause notice dated 5.6.2009 was sent to the appellant through courier, M/s. Blue Bird Mail Services Pvt. Ltd. Further, another copy of the said notice was sent on 31.5.2010, which was returned undelivered. Sending show-cause notice through courier is not an approved mode of service envisaged under Section 37C of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. Any summon or notice to the party has to be sent by registered post with acknowledgement due, to the person for whom it is intended or his authorized agent, or by affixing a copy of the same in the business premises of the person or by displaying the same in the notice board of the office which issued the notice. From the records it is seen that none of these modes have been followed by the Revenue.

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