HC holds that show cause
notice is mandatory for determining the disputed tax, interest and penalty and
same cannot be collected for 5 years without alleging omission / commission of
willful suppression, fraud, misrepresentation with intent to evade tax as
enumerated under the proviso to Section 73(1) of Finance Act; Notes that
pursuant to audit, the assessee, a cooperative bank, had provisionally paid
CENVAT credit under protest along with interest and penalty; Rejects Revenue’s
plea that no show cause notice is necessary when the assessee has paid tax and
penalty upon ascertainment by Audit Enquiry Officer before service of notice
u/s 73(1) of the Act; Referring to CBEC Instruction dated August 18, 2015 and
provisions of Section 73(3), HC remarks, “extended period of limitation of five
years is available only in cases where the omissions or commissions enumerated
in proviso to Section 73(1) are alleged”; Relying on SC rulings, HC also
quashes levy of penalty stating that show cause notice is mandatory where
Section 78(1) is invoked : Karnataka HC
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