Commissioner of Service Tax Vs. P.J. Margo Pvt. Ltd. - Court Judgment

Excerpt:
- [ k.n. keshavanarayana, j.] negotiable instruments act, 1881 - section 138 - offence under - complaint - judgment of conviction -appealed against to the court of sessions and subsequently made over to the presiding officer, fast track court-v, mysore - setting aside of judgment of conviction -appealed there against before the high court -interpretation made by the learned fast track judge with regard to the amendment brought to clause (b) of proviso to section 138 of the act is in the nature substitution and the amendment is deemed to have been brought into force from the inception of the act - consideration of - held, the object behind issuance of notice under clause (b) proviso to section 138 is to give intimation to the drawer of the cheque about dishonoring of the cheque and to give him an opportunity to pay the money covered under the cheque and thereby to avoid the criminal prosecution being launched against him. therefore, issuance of notice as required by clause (b) is mandatory. in this background, it is necessary to find out as to whether the amendment brought to clause (b) of the proviso to section 138 of the act with effect from 06.02.2003 by act no.55/2002 has retrospective effect. by this amendment brought into force from 06.02.2003, the requirement of issuing notice on the part of the drawer of the cheque within 15 days was substituted by 30 days. - no doubt, the words '15 days' occurring in clause (b) has been substituted by 30 days by the amendment. the question is as to whether by virtue of this amendment, the complainant could have issued a notice on 08.02.2003 though he had lost his right to issue such notice of demand on or after 29.01.2003. - there is nothing to indicate that the amendment brought to clause (b) of proviso to section 138 of the act has retrospective effect. merely because the said amendment was in the nature of substitution, it cannot have a retrospective effect, morose, when it relates to initiation of penal action. therefore, the high court is of the opinion that the amendment brought to clause (b) of the proviso to section 138 cannot be deemed to be in force from the inception and the amendment brought into effect subsequently cannot create a fresh cause-of-action for the complainant to issue notice and lodge a complaint based on such notice. - further held, the complainant received information from her banker on 13.01.2003 about the return of the cheque, cause-of-action for issue of notice began to run. as per the law that existed on that day, she was required to issue notice, within 15 days, which expired on 28.01.2003. on account of the inaction on the part of the complainant in not issuing notice of demand within 15 days from the date of the receipt of the information from her banker about the return of the cheque, she had lost her right to file a complaint for an offence under section 138 of the act, as there was no demand in writing made by her to the drawer of the cheque as required by law. - therefore, the complainant had no right to present a complaint. the amendment brought into force from 06.02.2003 did not give her a right to issue a notice of demand in respect of dishonoring of the cheque on 09.01.2003, which was intimated to her on 13.01.2003. therefore, the complaint lodged was defective and the learned magistrate could not have taken cognizance of the offence alleged. -judgment of acquittal passed by the fast track court is justified - negotiable instruments act, 1881 (act no. 55/2002 with effect from 6-2-2003) -clause (b) of proviso to section 138 -amendment by way of substitution - statutory provision -retrospective effect - discussed. (paras 13,14,15,16,20,21,22) d.v. shylendra kumar, j.1. the subject matter of the appeal filed under section 35g of the central excise act, 1944, by the commissioner of service tax, service tax commissionerate, bangalore, is as to whether the tax liability under the provisions of finance act, 2005, in respect of the activity of the respondent-assessee namely, activity of enhancing the acidic value of humic acid supplied to the assessee by its sister concern on job work, by collecting the process charges, for the period from 10-9-2004 to 28-2-2005 was liable to tax in terms of the provisions of section 11a of the act, on the premise that there was suppression of facts on the part of the assessee.2. on perusal of the order passed by the adjudicating authority we find that there is not even a finding about the suppression of facts on the part of assessee, which could have enabled the adjudicating authority to invoke the provisions of section 11a of the act. the appellate commissioner has rightly noticed this aspect of the matter and allowed the appeal of the assessee, holding that the adjudication order, in so far as it levied tax under the provisions of the act for the period from 10-9-2004 to 28-2-2005, is not sustainable and consequently, penalty cannot be imposed for this period.3. submission of sri jeevan j. neeralgi, learned standing counsel for the appellant, is that the assessee having failed to file a return for the period in question, though had actually registered as a service provider, was liable to pay tax under the provisions of the act, even prior to 1-3-2005 and therefore, it is obvious that the assessee has suppressed the taxable income (service charges) and as such the order passed by the adjudicating authority bringing to tax the amount realised by the assessee as service charges for processing certain products of its sister concern for this period should not have been either held to be bad or interfered by the appellate commissioner and should not have been confirmed by the tribunal and this order of the tribunal gives rise to a question of law warranting examination in this appeal under section 35g of the act.4. we find that the very liability is under section 65(19) of the finance act, 1994 and this statutory provision has undergone a change by the amendment given effect retrospectively from 10-9-2004, as substituted by the finance (no. 2) act, 2004 and again by way of amendment of finance act, 2005 notified on 16-6-2005, it was clarified that service provided by processing of goods is excisable. when this is the state of law, nothing can be attributed to the assessee to say that there was a suppression of facts on the part: of assessee for a period prior to issue of this notification dated 1-3-2005, when none knew about such possibilities.5. we are of the clear opinion that the appellate commissioner has rightly interfered and the tribunal has also very correctly confirmed the order of the appellate commissioner. hence, there is no scope for interference with the impugned order in this appeal filed under section 35g of the act. therefore, the appeal is accordingly dismissed.