Page 54 - GSTL_30th April 2020_Vol 35_Part 5

540 GST LAW TIMES [ Vol. 35
fore, the facility of payment of arrear dues in installments may not be extended
to the petitioner. He, therefore, submits that the writ petition is devoid of merit
and is liable to be dismissed.
14. In her reply submissions, Ms. Hawelia, Learned Counsel for the pe-
titioner submits that petitioner is at present paying GST at the rate of ` 22 to 25
lacs per month and, therefore, if the entire amount of service tax dues is required
to be paid at one go, petitioner may not be able to pay the same. On a query by
the Court Learned Counsel for the petitioner submits that petitioner is in a posi-
tion to pay installment of ` 6 lacs per month till the arrear service tax dues are
cleared. Regarding the interest portion, she submits that the rate of interest has to
be adjudicated upon before the same is imposed on the assessee. Therefore, the
interest part be remanded back to respondent No. 2.
15. Submissions made by Learned Counsel for the parties have been
considered. Also perused the materials on record.
16. Since Learned Counsel for the petitioner has placed reliance on the
decision of the Karnataka High Court in Prashanthi (supra), the same may be ad-
verted to at the outset. In Prashanthi (supra), the issue was issuance of recovery
notices under Section 87 of the Finance Act, 1994 without there being any adjudi-
cation under Section 73 of the said Act. In fact, the question formulated by the
Karnataka High Court for its consideration was whether respondents could have
initiated recovery proceedings under Section 87 of the Finance Act, 1994, when
there was no adjudication or quantification of the amount due and payable by
the registered service tax provider. Karnataka High Court considered the provi-
sions of Sections 73 and 87 of the Finance Act, 1994 along with other provisions
of the said Act as well as Rule 6A of the Service Tax Rules, 1994 and came to the
conclusion that power vested under Section 87(b)(i) and (ii) of the Finance Act,
1994 can be exercised only after adjudication of the show cause notice is conclud-
ed. Since there was no adjudication prior to issuance of the garnishee notices,
Karnataka High Court quashed the recovery notices.
17. Having noticed the above, Section 73 of the Finance Act, 1994 may
be adverted too. Section 73 is extracted hereunder :-
SECTION 73. Recovery of service tax not levied or paid or short-levied
or short-paid or erroneously refunded. - (1) Where any service tax has
not been levied or paid or has been short-levied or short-paid or erroneous-
ly refunded, Central Excise Officer may, within thirty months from the rel-
evant date, serve notice on the person chargeable with the service tax which
has not been levied or paid or which has been short-levied or short-paid or
the person to whom such tax refund has erroneously been made, requiring
him to show cause why he should not pay the amount specified in the no-
tice :
Provided that where any service tax has not been levied or paid or has been
short-levied or short-paid or erroneously refunded by reason of -
(a) fraud; or
(b) collusion; or
(c) wilful mis-statement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or of the
rules made thereunder with intent to evade payment of ser-
vice tax, by the person chargeable with the service tax or his
agent, the provisions of this sub-section shall have effect, as if,
for the words “thirty months”, the words “five years” had
been substituted.
GST LAW TIMES  30th April 2020  54