(Per : HONOURABLE MR. JUSTICE AKIL KURESHI)
1. The petitioner has challenged validity of rule 2 of Service Tax (Eighth Amendment) Rules, 1997. The petitioner has also consequently challenged the impugned show-cause notice dated 16-3-1999 as at Annexure 'F' to the petition.
2. By amendment brought in rule 2 of Service Tax Rules, 1994 by virtue of Service Tax (Eighth Amendment) Rules, 1997, the following addition was made in sub-rule (i)i in clause (d):-
"(xvii) in relation to services provided by a goods transport operator, every person who pays or is liable to pay the freight either himself or through his agent for the transportation of goods by road in a goods carriage."
3. On the basis of such amendment, the respondent authorities issued a show-cause notice dated 16-3-1999. In the notice, it was stated that the petitioner was required to pay service tax but had not applied for registration and has, therefore, contravened the provisions of section 68 and 70 of the Finance Act, 1994. The petitioner was, therefore, directed to furnish quarterly return and also show cause why penalty should not be imposed under the said Act. Learned counsel for the petitioner submitted that the issue involved is squarely covered by the decision of the Apex Court in the case of Laghu Udyog Bharati vs. Union of India reported in 1999 (112) E.L.T. 365 (S.C.). He submitted that in such decision, the statutory provision noted above has been declared ultra vires. The show-cause notice which is issued on the basis of such provision, therefore, is required to be quashed.
4. Though served, no one has appeared for the respondent nor any reply filed.
5. We have perused the petition and the decision cited by the counsel for the petitioner. It clearly emerges that the very rule that the petitioner has challenged in this petition came up for consideration before the Apex Court in the case of Laghu Udyog Bharati vs. Union of India (supra). The rule has been declared ultra vires the Act. There is nothing on the record suggesting that the impugned show-cause notice was not on the basis of such amended rule.
6. We may notice that subsequently, the Finance Act, 1994 itself came to be amended, however, the period in question does not pertain to the time when such amendment was brought in the Act itself.
7. Under the circumstances, since the rule has already been struck down by the Apex Court, separate declaration as prayed for in the petition is not required to be granted. However, the impugned show-cause notice dated 16-3-1999 as at Annexure 'F' is quashed. Rule made absolute. No costs.
( Akil Kureshi, J. ) ( Harsha Devani, J. ) hki Top