1. Petitioner, a Private Limited Company being a registered Service Tax Assessee, vide Registration NO.AABCM3803FST0001, is invoking the writ jurisdiction of this Court, for laying a challenge to the Notification dated 09.06.2017 at Annexure-N and the Show Cause Notice dated 11.04.2018 issued by the 4th respondent at Annexure-K, in terms of Section 174(2)(e) of the Central GST Act, 2017, inter-alia asking him to show cause as to why certain sums of money allegedly "short paid" for the period between 2012-13 and 2016-17 should not be recovered with interest & penalty; as the alternative to the prayer for quashing of the said Notification, the petitioner argues that the same is not applicable to him.
2. The respondents having entered appearance through their Senior Panel Counsel resist the Writ Petition by filing a Statement of Objection inter-alia contending that the Writ Petition is premature; petitioner could not have approached the writ court without exhausting the alternate & equally efficacious remedy of replying to the Show Cause Notice; and the impugned Notification being legally valid, is applicable to the petitioner in the given fact matrix.
3. Having heard the learned counsel for the parties and having perused the Petition Papers, this court declines to grant indulgence in the matter for the following reasons:
(a) the impugned Notification is issued under section 2(b) of the Central Excise Act, 1944 r/w Rule 3 of Central Excise Rules, 2002 whereby, the territorial jurisdiction of high rung officials of the Department of Central Excise and Service Tax have been conferred with the territorial jurisdiction as specified in the Table appended thereto; the first submission of the petitioner that the impugned Notification could not have been issued after the CGST Act, 2017 was enacted by the Parliament inter-alia repealing Chapter V of the Finance Act, 1994, does not merit acceptance inasmuch as Section 174(2)(e) of the CGST Act, 2017 specifically provides that such repeal shall not affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal p[proceedings, recovery of arrears, remedy in respect of any such duty, tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishment; thus, the power to initiate such proceedings is retained as a residue even after the said repeal, as rightly contended by learned Senior Panel Counsel representing the Revenue;
(b) the second contention of the petitioner that the impugned Notification having been issued under the provisions of the Central Excise Act, 1944, cannot be made applicable to the proceedings that admittedly have arisen under the provisions of Finance Act, 1994, at the first blush appears to be attractive; however, a deeper examination in the light of the provisions of both Chapter V of 1994 Act and various other provisions of 1944 Act, robs off all and whatever sheen it has; true it is that, the impugned Notification has been issue under section 2(b) of the 1944 Act fixing the territorial jurisdiction of the officials/authorities functioning under the said Act; obviously it applies to the proceedings arising under the said Act, needs no elaboration; however, several provisions incorporated in Chapter V of the Finance Act, 1994 both by definition, designation and implication make the Central Excise officials as its ex-officio functionaries; Section 83A also vests power in the Central Excise Officer to adjudge liability of an assessee for penalty;
(c) Section 2(b) of the 1944 Act gives the definition of "Central Excise Officer", it is a "means and includes" definition, in a way; in the "means" part are included the following officers of the Central Excise: Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, Commissioner, Commissioner (Appeals), Additional Commissioner, Joint Commissioner, Assistant Commissioner or any other officer of Central Excise Department; in the "includes" part of the definition are comprised any officer or person in whom the Central Board of Excise and Customs vests the powers of "Central Excise Officer;" Section 83 which finds place in Chapter V of the 1994 Act deems the service tax to be a "duty of excise" and thereby, makes the enlisted provisions of 1944 Act to be applicable to the proceedings under the 1994 Act, mutatis mutandis;
(d) Rule 3 of the Central Excise Rules, 2002 reads as under:
" Appointment and jurisdiction of Central Excise Officers. -- (1) The Board may, by notification, appoint such person as it thinks fit to be Central Excise Officer to exercise all or any of the powers conferred by or under the Act and these rules.
(2) The Board may, by notification, specify the jurisdiction of a Principal Chief Commissioner of Central Excise or Chief Commissioner of Central Excise, as the case may be, Principal Commissioner of Central Excise or Commissioner of Central Excise, as the case may be or Commissioner of Central Excise (Appeals) for the purposes of the Act and the rules made thereunder.
(3) Any Central Excise Officer may exercise the powers and discharge the duties conferred or imposed by or under the Act or these rules on any other Central Excise Officer who is subordinate to him."
A bare perusal of this Rule in general and Sub Rule (2) of the said Rule in particular makes it clear that the Board in its discretion can specify the jurisdictional limits of the Excise Officers, for the purpose of the Act and the Rules promulgated thereunder; this apart, Sub Rule (3) is structured in such a way that any Central Excise Officer may exercise the powers vested in his sub-ordinate officer; the impugned Notification thus needs to be interpreted in the light of section 2(b) of the Act r/w Rule 3 of the 2002 Rules; in terms of the impugned Notification, the territorial jurisdiction of Bengaluru South Commissionerate is vested in the Commissioner of Central Excise and Service Tax, Audit-I, Commissionerate, Bengaluru, as rightly contended by the Panel Counsel for the Revenue;
(e) the above apart, the issue relating to territorial jurisdiction ordinarily does not go to the root of the matter vide Hiralal Patni v. Kali Nath, 1962 (2) SCR 747 wherein the Apex Court has observed as under:
"4. ....It is well settled that the objection as to local jurisdiction of a court does not stand on the same footing as an objection to the competence of a court to try a case. Competence of a court to try a case goes to the very root of the jurisdiction, and where it is lacking, it is a case of inherent lack of jurisdiction. On the other hand an objection as to the local jurisdiction of a court can be waived ...."
The above observations though made in the light of the provisions of CPC equally apply to the territorial jurisdiction of the officers of the Excise Department/Service Tax Department as well, therefore, the contention as to incompetence and inapplicability of the impugned Notification, is liable to be negatived;
(f) the reliance by the counsel for the petitioner on the decision in Air India v. UOI and others, (1995) 4 SCC 734, does not come to his aid; the Apex Court banking upon "Benian on Statutory Interpretation," 2nd Edition, held that if a subordinate legislation is to survive the repeal of its parent statue, the repealing statute must say it in so many words and by mentioning the title of the subordinate legislation; there is no quarrel with this proposition at all; the question is with its invocability when the Central GST Act, 2017 which repeals the Acts in question makes a saving provision that too by naming them, in so many words; it has been a settled principle of law of precedent that a decision is an authority for what it actually lays down, and not for what all logically follows from what is laid down vide Lord Halsbury in Quinn v. Leathem (1901) A.C. 495, 506: therefore, much milk cannot be derived by placing reliance on the said ruling;
(g) having held the impugned Notification as being valid and applicable to the petitioner, this court declines to quash the impugned notice which only calls upon him to submit a reply for showing cause against the proposed action namely, the recovery of 'short payment' with interest/penalty; there is force in the submission of learned Panel Counsel for the Revenue that in terms of ratio in Mega Corporation v. Commissioner of Service Tax, (2015) 1 TMI 1095, an assessee hastily may not knock at the doors. of the writ court seeking quashment of Show Cause Notice; normally, the person to whom a Show Cause Notice is issued should show cause to the authority issuing the same since such authority is presumably in a better position to ascertain and understand the complexity of fact matrix more particularly arising under special legislations; writ court ordinarily may not undertake the exercise which the statutory authority designated for the purpose is expected to do; however, once a decision is taken by the authority after considering the cause shown by the noticee, writ jurisdiction may become invocable, subject to all just exceptions; therefore, this court de
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clines to examine the validity and sustainability of the impugned Show Cause Notice; (h) suffice it to give petitioner some reprieve by granting a reasonable period for submitting his reply to the impugned Show Cause Notice; the set of Rulings which the petitioner banked upon for invalidation of the said notice can also be pressed into service in structuring his reply to the Notice so that when a challenge is laid to the decision of the authority thereon, it's examination becomes worthwhile. In the above circumstances, this Writ Petition being devoid of merits, fails; however, petitioner is given a period of eight weeks to submit his reply to the Show Cause Notice in question; it is needless to mention that no precipitatory action shall be resorted to by the respondents against the petitioner till after his reply is considered, and also till the lapse of four weeks after the decision taken thereon, is conveyed to him. All other contentions of the parties are kept open. No costs.