Service Tax : No power to ARREST during search, deptt. must adjudicate dues first

Department cannot arrest an assessee even before issuance of show-cause notice and even before quantifying/adjudicating service tax due from him, as that would amount to ‘putting cart before horse’, which is impermissible. — Rajender Singh v. UOI [2015] 58 taxmann.com 245 (Punjab & Haryana)

Court’s key observations :

7. … the requirement of arrest for the arrears due for the last more than 4 years, of which, there was no quantification, prima facie, in our opinion, would only infringe on the fundamental rights of the petitioner, as the calculations on the basis of which, he is sought to be arrested, as per the arrest memo, was issued only at his back and without having given him appropriate opportunity to file reply to the show cause notice, which admittedly was issued on 23.04.2015, post his arrest…

9. … It is, thus, apparent that the respondents have presumed that it is proved that an offence has been committed and have already adjudicated on the criminal liability of the petitioner. …

10. …. ‘the attitude to arrest first and then proceed with the rest is despicable.’ ….

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