Draft your Show Cause Notices properly, otherwise they will be quashed
THE great litigation industry in the Revenue Department starts with the Show Cause Notice and somehow this is given the least importance. Often the euphoria at the time of detection of the case does not remain till the issue of Show Cause Notice. Show Cause Notices are drafted callously and carelessly without clearly explaining the charges levelled and often ignoring statutory provisions.
Recently the CESTAT quashed a Show Cause Notice and the consequent adjudication order. The CESTAT observed,
The show cause notices in the present case before us, were issued on the basis of a prima facie assumption by Revenue that the assessee was assessable to levy of service tax for providing BAS. The reasons for such prima facie assumption of Revenue were however not specified in the show cause notices. Mere extraction of the entire provisions of Section 65(19) of the Act does not fulfill the requirement.
On the aforesaid analysis, the show cause notices dated 21.4.2010 and 20.4.2011 are invalid. This infirmity is incurable; these show cause notices are therefore quashed. Since the adjudication order is the consequence of the invalid show cause notices, it is also quashed.
However the Tribunal granted the Revenue another opportunity toinitiate proceedings afresh, by issuance a fresh show cause notice, clearly setting out the reasons, but in accordance with law.