UNION OF INDIA & ORS. versus COASTAL CONTAINER TRANSPORTERS ASSOCIATION & ORS.

Citation: [2019] 4 S.C.R. 915 · Decided: 26-02-2019 · Supreme Court of India · Bench: UDAY UMESH LALIT · Disposal: Appeal(s) allowed

Judgment (excerpt)

A
B
C
D
E
F
G
H
915
UNION OF INDIA & ORS.
v.
COASTAL CONTAINER TRANSPORTERS
ASSOCIATION & ORS.
(Civil Appeal No. 2276 of 2019)
FEBRUARY 26, 2019
[UDAY UMESH LALIT AND R. SUBHASH REDDY, JJ.]
Constitution of India: Art.226 – Show cause notice issued
under s.73 of Finance Act by appellant-authority proposing to
demand service tax from respondents under the category of “cargo
handling service” – Respondent’s case was that the service
provided by them fell under the taxable category of “goods
transport agency” –  Writ petition filed by respondents before the
High Court challenging the show cause notice – High Court
quashed the show cause notice – On appeal, held: High Court
committed error in entertaining the writ petition under Art.226 at
the stage of show cause notices – Neither it was a case of lack of
jurisdiction nor any violation of principles of natural justice was
alleged so as to  entertain the writ petition at the stage of notice –
High Court ought not to have entertained the writ petition, more so,
when against the final orders appeal lies to the Supreme Court –
When there is a serious dispute with regard to classification of
service, the respondents ought to have responded to the show cause
notices by placing material in support of their stand but at the same
time, there was no reason to approach the High Court questioning
the very show cause notices – Moreover, even the contents of show
cause notices did not sow that there were no factual disputes –
Finance Act, 1994 – s.73.
Allowing the appeal, the Court
HELD: 1.  The controversy in the instant case related to
the classification of services rendered by the respondents.  It is
not in dispute that if the show cause notices culminate into an
order, the appeal would lie to this Court.   If any finding is recorded
by this Court at this stage, same will prejudice either of the parties.
In view of the contentions raised, it cannot be said that there are
                                      [2019] 4 S.C.R. 915
915
A
B
C
D
E
F
G
H
916
SUPREME COURT REPORTS
[2019] 4 S.C.R.
no factual disputes.  Applicability of the circulars dated 06.08.2008
and 05.10.2015 was also in serious dispute.  Further the
classifiability of service rendered by a particular assessee is to
be considered with reference to facts of each case depending
upon nature of service rendered and the contract entered into.
There cannot be any general declaration, as prayed for.  It is true
that circulars issued by the CBEC are binding on the authorities,
but at the same time, such circulars are applicable or not, is a
matter which is to be considered with reference to facts of each
case.  When it is the case of the appellants that such circulars
referred would apply only in case of road transportation but not
otherwise, then it is a case for consideration by competent
authority on receipt of the explanation but same is no ground to
quash the show cause notices.  [Paras 16, 18] [924-C; 925-B-H;
926-A]
2. When there is a serious dispute with regard to
classification of service, the respondents ought to have responded
to the show cause notices by placing material in support of their
stand but at the same time, there is no reason to approach the
High Court questioning the very show cause notices.
[Para 19] [926-E-F]
Deputy Commissioner, Central Excise & Anr. v. Sushil
and Company (2016) 13 SCC 223; Union of India &
Anr. v. Guwahati Carbon Limited (2012) 11 SCC 651;
Union of India v. Hindustan Dev. Corpn. Ltd. 1998
(100) ELT 14 (SC); Malladi Drugs & Pharma Ltd. v.
Union of India  2004 (166) ELT 153 (SC) – relied on.
Paper Products Ltd. v. Commissioner of Central Excise
1999 (112) ELT 765 (SC) – held inapplicable.
Case Law Reference
(2016) 13 SCC 223
      relied on
Para 11
(2012) 11 SCC 651
      relied on
Para 13
1998 (100) ELT 14 (SC)     relied on
Para 13
1999 (112) ELT 765 (SC)   held inapplicable
Para 14
2004 (166) ELT 153 (SC)   relied on
Para 19
A
B
C
D
E
F
G
H
917
CIVIL APPELLATE JURISDICTION:  Civil Appeal No. 2276
of 2019.
From the Judgment and Order dated  18.12.2017 of  the  High
Court of  Gujarat at Ahmedabad in Special Civil Application No. 6679 of
2016.
K. Radha Krishnan, Sr. Adv., Ms. Sunita Rani Singh, Ms. Nisha
Bagchi,  Ms. Nera Malik, B. Krishna Prasad, Advs. for the Appellants.
Dr. A. M. Singhvi, S. K. Bagaria, Sr. Advs.,  Arijit Prasad, Hardik
Modh, Ms. Devanshi Singh, Ms. Aastha Mehta, Ms. Deepanwita
Priyanka, Advs. for the Respondents.
The Judgment of the Court was delivered by
R. SUBHAS

Excerpt shown. Read the full judgment & AI analysis in Lexace.