The Bombay High Court noted lack of Show Cause Notices in Service Tax Case, allowed Petitioner’s Contention to be Challenged Before Departmental Authorities.
Facts
The petitioner, an association of drilling contractors is before the Court in the present proceedings assailing the Circular No. 80/10/2004-ST dated 17 September 2004 (Exhibit A) issued by the respondents interalia on service tax leviable on “survey and exploration of minerals”. The petitioners have contended that by virtue of the impugned circular the services of prospecting of minerals is now made to fall within the ambit of taxable entry under Section 65(105)(zzv) of the Finance Act,1994.
Submissions
Mr.Shroff, Senior Counsel for the petitioners, stated that with effect from the year 2007 the members of the petitioners are being taxed under the heading ‘mining services’ and accordingly Service tax is being paid.
Decision
The division bench of Justice Jitendra Jain and Justice G. S. Kulkarni observed that except one member, the department also has not issued any show cause notice for almost 17 years to any of the petitioner’s members and the position that the petitioners are paying service tax being classified under ‘mining services’, has continued to operate.
The bench opined that so far no show cause notices are issued to the members of the petitioner except as recorded by it in the case of M/s. Transocean Offshore International Ventures Ltd.
It was observed by the court that neither any proceedings are initiated nor any proceedings in regard to the other members are pending before the department. The circular as challenged in the petition, was issued almost 19 years back. The department has also not taken any action and the members of petitioner since 2007 are paying service tax under the category of ‘mining services’.
The bench ordered that all contentions of the members of the petitioner on the issue as raised in the present petition are expressly kept open to be agitated, before the Departmental Authorities, in the event any need arises.
Case title: International Association of Drilling Contractors (South Central Asia Chapter) and Anr. v/s The Union of India & Ors.
Citation: WRIT PETITION NO. 37 OF 2006
