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2019 (1) TMI 75 - TELANGANA AND ANDHRA PRADESH HIGH COURTExtended period of limitation - Commercial coaching services - sheet-anchor of the petitioner academy’s case is that the department could not have invoked the extended period of limitation as it obtained registration in the year 2012 and filed a ‘nil’ return claiming the benefit of exemption under the Notification No.33/2011 dated 25.04.2011 and therefore, the authorities are presumed to be aware of its activities and cannot claim ignorance or attribute suppression to it. Held that:- The mere factum of filing a ‘nil’ return, followed by cancellation of the registration, speaks more of the premeditated acts of the petitioner academy and do not disclose any bonafides on its part. The full facts were never presented to the department whereby the petitioner academy could claim such benefit in the context of the limitation period. The actual transaction between the petitioner academy and the society only came to light after investigation by the authorities and therefore, the authorities were justified in invoking the extended period of five years limitation. The convoluted scheme in the form of the MoU dated 01.04.2009 adopted by the petitioner academy and the society, two separate legal entities, manned by one single individual, A.Rajendra Prasad, essentially seems to have been directed at avoiding tax liability but in effect, it amounted to evasion of tax, which is per se illegal. The manner in which the petitioner academy and the society went about the transaction manifests in no uncertain terms that the intention was to evade tax - the desperate ploy of the petitioner academy in its reply affidavit to completely disown its coaching activity for entrance exams clearly highlights its lack of bonafides and its real intention. That being so, the question of giving it the benefit of the normal limitation period would not arise. In the case on hand, the mere factum of the petitioner academy obtaining registration and filing a ‘nil’ return followed by cancellation of the registration seems to be a self-serving act for the purpose of warding off extended period of limitation at a later point of time. This premeditated act on the part of the petitioner academy was only to present a fait accompli and there is no indication of the full facts, including the existence of the MoU, having been disclosed by the petitioner academy at that point of time. When the authorities did not have the complete facts before them, a presumption that they were aware of the core activity of the petitioner academy, i.e., coaching for entrance examinations, would not arise. Invocation of the extended period of limitation was therefore justified. Inclusion of non-includables in the taxable services - It was also contended by appellant that non-includable items were also brought within the ambit of taxable services - Held that:- Separate heads were not shown in the invoices under which fees were collected by the petitioner academy, whereby students were made aware of how much they were paying for the coaching and how much they were paying for other services, such as transportation, snacks, etc. These were straightaway shown as expenditure by the petitioner academy and claimed as such. The Commissioner opined that when there was no separate receipt towards each head and what was collected was fees alone, the petitioner academy could not thereafter claim deductibles from such fees by showing such self-serving and unauthenticated expenditure. The amounts claimed towards expenditure under various heads by the petitioner academy cannot be tested by this Court and, therefore, even if they are liable to be excluded from the amount received towards the taxable services, such an exercise would not fall within the realm of this writ petition. Thus, this Court finds that invocation of the extended period of limitation was justified on facts. The coaching services rendered by the petitioner academy were taxable under the service tax regime and were not covered by the exemptions, be it under the Notifications or the Act of 1994 - As regards the alleged inclusion of non-includables in the taxable services, the same is beyond the purview of a writ petition involving factual verification which this Court cannot undertake. Petition dismissed - decided against petitioner.
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