Page 112 - GSTL_2nd July 2020 _Vol 38_Part 1

30 GST LAW TIMES [ Vol. 38
nexure P-1, dated 16-12-2016, passed by Respondent No. 1-Additional Commis-
sioner (Preventive), whereby a letter has been issued to the management of South
Eastern Coalfields Limited (SECL) requesting the SECL authorities to freeze the
amount payable to the petitioner-establishment. Similarly, the challenge is also to
Annexure P-2, dated 16-12-2016, which is a similar letter issued to the Union
Bank of India, i.e., one of the Bankers of the petitioner-establishment. Annexure
P-3, dated 21-10-2016, is a show cause notice which is also under challenge.
2. On the basis of the discussions referred to in the show cause notice
(Annexure P-3) it was assumed that the Petitioners have failed to correctly assess
and pay service tax within stipulated period and that they have also failed to
submit ST-3 return and have also failed to show the correct taxable amount in
ST-3 return for the period 2011-12 to 2015-16.
3. The solitary ground of challenge by the Petitioners to these im-
pugned orders is that there has been no determination made by the Respondents
assessing the actual amount of default on the part of the petitioner-establishment
upon which the recovery proceedings could have been initiated. Learned Coun-
sel for the Petitioners refers to the provisions of Sections 72, 73 and 87 of the Fi-
nance Act and submits that until and unless there is a determination made by the
Respondents, no recovery proceedings could have been initiated. According to
the Counsel for the Petitioners, Annexure P-3 which is also under challenge in
the present writ petition is nothing but a show cause notice. That, the show cause
notice must be proceeded with and acted upon resulting in a determination of an
assessment of service tax, that has not been levied or short levied or short paid or
erroneously refunded. In the absence of any such adjudication or determination,
no recovery proceeding could have initiated and therefore the two letters issued
by the Respondents, i.e., Annexures P-1 and P-2, one to the management of SECL
and second to the Union Bank of India are bad in law and not sustainable and
deserve quashment.
4. Learned Counsel for the Respondents however submits that it is only
at the stage of show cause notice and nothing prevents the Petitioners from sub-
mitting a detailed reply and contest their case before the authorities and the writ
petition at this juncture in its present form may not be maintainable and the same
deserves to be rejected in the light of the judgment passed by this Court in the
case of M/s. Sarda Energy & Minerals Ltd. v. Union of India & Another, decided on
28-6-2017 in Writ Petition (T) No. 73 of 2017.
5. Per contra, Learned Counsel for the Petitioners submits that the let-
ters (Annexures P-1 and P-2) also reflect that they have been issued invoking the
powers conferred upon the authorities under Section 87 of the Act. Proceedings
under Section 87 could have been initiated only on determination being done
under sub-section (2) of Section 73. In the instant case, there does not appear to
be any such proceeding drawn or determination made and thus prayed for the
quashment of the same.
6. Having heard the contentions put forth on either side, it would be
relevant to take note of a couple of judgments of different High Courts in this
regard. The Karnataka High Court in the case of Mrs. Prashanti v. The Union of
India & Others, decided on 29-4-2015 in Writ Petition No. 14054 of 2015 (T-TAR)
[2016 (41) S.T.R. 392 (Kar.)], in paragraphs 18 and 19 has held as under :

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