2026-VIL-822-CESTAT-MUM-ST
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SERVICE TAX CESTAT Cases

Service Tax - Defective Show Cause Notice – Show Cause Notice for non-payment of service tax on "Data Processing Fees" without specify the particular sub-clause of Section 65(19) of the Finance Act, 1994 under which the appellant's activities were proposed to be classified - Whether the non-specification of the sub-clause in the Show Cause Notice renders it defective and violates the principles of natural justice - HELD - The Show Cause Notice is fundamentally defective as it failed to specify the particular sub-clause of Section 65(19) under which the appellant's activities were proposed to be classified. Where a statutory provision contains several distinct sub-clauses, each describing a separate species of taxable activity, the Show Cause Notice must identify the specific sub-clause or sub-clauses alleged to be attracted. This requirement is not merely a matter of form, but of substance, as it enables the assessee to comprehend the exact allegation and formulate an effective reply - The deficiency or vagueness of a SCN cannot be cured by the adjudicating or appellate authority, as the Show Cause Notice is the source from which the adjudicating authority derives its jurisdiction. Allowing the adjudicating authority to specify the sub-clauses at the adjudication stage would be impermissible as it would improve the Revenue's case at the expense of the assessee's right of defence - The impugned order is set aside and the appeal is allowed on the ground that the Show Cause Notice was defective and violated the principles of natural justice
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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