The court's order came while rejecting a plea by the National Building Construction Corporation Ltd challenging a 2015 letter from the Director General of the Central Excise Intelligence regarding probe by its additional director general of Lucknow zone in service tax evasion cases of all the branches of NBCC.
In his letter, the director general of the department had apprised the NBCC about the permission given to the Additional Director General of Directorate General of Central Excise Intelligence (DGCEI), Lucknow Zonal Unit, to investigate these cases.
The NBCC, a public sector undertaking under the Ministry of Urban Development, has also sought quashing of notice/summons, of January 21 and 28, 2016 for production of documents and details issued by DGCEI's assistant director of Meerut unit on the ground that they were "unwarranted and arbitrary".
The DGCEI had told the court that a centralised probe was needed and justified as multiple investigations all over the country on the same issue and question would result in inconvenience, harassment and wastage of time and resources.
A bench of Justices Sanjiv Khanna and Prathiba M Singh said, "Central Excise Officers of the DGCEI have all India jurisdiction and can issue notices and enquire into matters relating to service tax against any assessee/ person even if the said person or assessee is registered with one or multiple commissionerates."
The bench, however, expressed reservation on the language used in some of the notices/ summons issued by the DGCEI asking for presence of managing director and senior officer of the NBCC with "threats or warning that they would be punished or prosecuted".
It said the presence of senior officer may not be necessary when legal issues arise for consideration and on such issues, the assessee relies on professional advice.
"The respondents (DGCEI) would be well advised to refrain and not use and give threats. The letters/ notices must be appropriately worded. In a given case they may refer to the penal or prosecution provisions to ensure compliance but they should not intimidate and be minatory," the court said.
The bench said it do not agree with the NBCC's assertion that centralisation of investigation would lead to harassment and inconvenience.
It would be desirable that investigation are centralised when identical and similar issues in case of an assessee arise for consideration in different commissionerates, it said.
The court said the NBCC should comply with notices of the DGCEI to furnish evidence and documents pertaining to the Project Management Consultancy charge regarding commissionerate/ registration except those which are subject matter of show cause notice of March 13, 2015 issued by the Commissionerate of Central Excise and Service Tax, Patna.
The court vacated the interims orders passed earlier and said the period of February 10, 2016 when the stay order was passed till the pronouncement of the verdict would be excluded for purpose of computing limitation period specified for issue of show cause notice under the Finance Act.