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Service Tax - High Court - Case Laws
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2020 (3) TMI 1451
Learned Government Pleader for Commercial Tax stated across the Bar that till expiry of the statutory period of 90 days, no coercive steps will be taken by the respondent authorities in furtherance to the impugned order dated 25.02.2020.
HELD THAT:- List the case after six weeks.
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2020 (3) TMI 1414
Validity of statement dated 12th February, 2020 issued by the respondent no.4 under the SVLDR Scheme - Learned senior counsel for the petitioner states that respondent no.4 without taking into account the amount of Rs.4,92,47,372/- deposited by the petitioner has determined that the liability of the petitioner is Rs.5,55,34,486/- - HELD THAT:- Issue notice.
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2020 (3) TMI 1361
Seeking stay of order - demand of service tax with interest and penalty - waiver of pre-deposit pending disposal of appeal - HELD THAT:- This Court directs the 1st respondent to dispose of the appeal filed by the petitioner, on merits and in accordance with law, after affording due opportunity of personal hearing to the petitioner, within a period of six weeks from the date of receipt of a copy of this order.
Petition disposed off.
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2020 (3) TMI 1004
Maintainability of appeal - appropriate forum - Recovery of service tax - classification of services - Construction of Complex Services or Commercial or Industrial Construction Service - period from April, 2005 to March, 2010 - HELD THAT:- Indeed, whether the services provided by the Respondent were classifiable directly as 'Construction of residential Complexes and Commercial or Industrial Construction Service' or as 'Works Contract Service' was a neat question of law. The case involves the issue of classification and, therefore, in such instance an appeal against the order of the CESTAT would lie in the Supreme Court under Section 35L of the Central Excise Act, 1944, even if there are other questions involved.
The present appeal before this Court is not maintainable.
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2020 (3) TMI 1003
Clubs or association service - doctrine of mutuality - scope and exclusions from the definition of “club or association” or not - HELD THAT:- The issue decided in the case of STATE OF WEST BENGAL & ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE & ORS. VERSUS M/S. RANCHI CLUB LTD. [2019 (10) TMI 160 - SUPREME COURT] where it was held that from 2005 onwards, the Finance Act of 1994 does not purport to levy service tax on members’ clubs in the incorporated form.
It is evident that the proposed demand in the impugned show cause notice can no longer be sustained - petition allowed - decided in favor of petitioner.
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2020 (3) TMI 917
Supply of Tangible Goods Services - non-payment of Service Tax - appellant had been collecting Service Tax from its customers since 2008, but had not deposited the same with the Government Exchequer - demand alongwith interest and penalty - extended period of limitation - HELD THAT:- The appeal is admitted on substantial questions of law.
Issue notice - List on 28.05.2020 in the category ‘After Notice Miscellaneous Matters’ for final disposal.
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2020 (3) TMI 811
Power of service tax department to Audit and seek information - Post GST era - Rule 5A of the Service Tax Rules, 1994 as having lapsed w.e.f. 01.07.2017 - Held that:- From Section 94 of the Finance Act, 1994 it would be seen that the Central Government has been empowered to make Rules for carrying out the provision of Chapter 5 of the Finance Act, 1994, which contains the provisions in relation to levy of service tax.
Power of Central Government to frame Rules - Held that:- The specific aspects in respect of which the Rules may be framed as enumerated in clauses (a) to (m) of Section 94(2) do not take away the general and omnibus power to make Rules conferred by the opening words of Section 94 (2). The Parliament consciously while enumerating the specific matters in respect of which Rules may be framed, preserved the general Rule making power of the Central Government. The only statutory limitation placed on the said Rule making power is that the Rule(s) should be framed for the purpose of enforcing the service tax regime. Therefore, the power of the Central Government to frame rules for carrying out the provisions of the service tax regime was exhaustive, and there is absolutely nothing to suggest that the said power did not encompass the power to frame a Rule of the kind as Rule 5A, as framed w.e.f. 28.12.2007.
Scope of Rule 5A - Held that:- The power vested in the Competent Authorities to recover service tax not levied or paid, or short levied or short paid, or erroneously refunded [under Section 73 of the Finance Act, 1994] would remain a dead letter, if the Competent Authority under the Act is not empowered in terms of the Rule 5A. The said Rule 5A is, even otherwise, relatable to Clause (k) of Section 94 (2), since the said Rule – while casting an obligation on the assessee to produce the records, he is obliged to maintain under the Finance Act, 1994, simultaneously empowers the Competent Authorities to ensure compliance of the said obligation. Thus, we reject the submission of learned senior counsel for the Petitioner that the Central Government lacked the authority and competence to frame Rule 5A.
Post GST era - Held that:- there is nothing to show that the Parliament intended to grant blanket immunity to all assessees whose past acts and omissions may, otherwise, fall foul of the provisions of, inter alia, Chapter V of Finance Act, 1994. On the contrary, it is clear to us that the intention of the Parliament was clearly to save not only ongoing investigation, inquiry, verification etc. but also to specifically enable the initiation of fresh investigation, inquiry verification etc. in respect of acts and omissions relating to inter alia, the erstwhile service tax regime.
Conclusion:- the assessee is obliged to maintain and provide all the records prepared or maintained by it for accounting of transactions with regard to providing of any service; receipt or procurement of input services and payment for such input services; receipt, purchase, manufacture, storage, sale or delivery, as the case may be, in regard to inputs and capital goods; other activities such as manufacture and sale of goods, if any and; all other financial records maintained by him in the normal course of business. A perusal of the notice dated 06.11.2019 shows that the Respondents have called for records which the Petitioner is obliged to maintain in terms of Rule 5 of the Service Tax Rules. Therefore, we do not find merit in this submission either.
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2020 (3) TMI 758
Condonation of delay in filing appeal - HELD THAT:- By this application the applicant seeks condonation of delay of 150 days in re-filing the appeal. For the reasons stated in the application, the delay is condoned.
Application disposed off.
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2020 (3) TMI 661
Validity of SCN - SCN challenged on the point that the procedure set out for adjudication/assessment has not been followed, insofar as there is no pre-consultative process that has been followed in this case - HELD THAT:- Evidently, the pre-adjudication/consultation envisaged is with the Assessing Officer and not with the Audit Commissioner and this error has been rectified by order dated 09.01.2020. To this extent paragraph 11 of the impugned show cause notice is set aside. With the regularisation of the procedure, proceedings under the impugned show cause notice will continue.
Petition disposed off.
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2020 (3) TMI 660
Refund of Service Tax - Time Limitation - reverse charge mechanism - Benefit of N/N. 41/2007-ST dated 6th October 2007 (amended by the notification No. 17/2008-ST dated 1st April 2008) - HELD THAT:- The clause 2 (e) of the Notification No. 41/2007-ST must be applied strictly, and the Appellant cannot selectively seek relief of the said notification. The CESTAT has passed a laconic, well-reasoned and thorough order upholding the order of the Commissioner (Appeals), which merits absolutely no interference.
It is trite, that while interpreting exemption notifications, such notifications have to be interpreted, stricto sensu.
The question of law raised in this appeal is answered against the Appellant and in favour of the Respondent - appeal dismissed.
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2020 (3) TMI 459
Rectification of Mistake - Error apparent on the face of record or not - benefit of the extended period was denied on the ground that the Appellant had not invoked the plea, or that it was a registered as a not-profit organization under the Societies Registration Act, 1860.
Whether the CESTAT suffered from any error apparent on face of record in light of the contention of the appellant that it had on numerous instances invoked the plea of the extended period?
HELD THAT:- Honorable Supreme Court in COMMISSIONER OF CENTRAL EXCISE, MUMBAI VERSUS BHARAT BIJLEE LIMITED [2006 (4) TMI 136 - SUPREME COURT] has held that Failure to take into considerations the material evidence, which is present on the record, would certainly amount to mistake apparent on the face of record and the tribunal under the circumstances would have the jurisdiction to correct the said mistake in exercise of its powers under Section 35C(2) of the Act.
In light of Bharat Bijlee Ltd., it is amply clear that the failure to consider material evidence on record, would amount to mistake apparent on the face of record, and hence, the failure of the CESTAT to take into consideration the plea of the appellant regarding extended time period, at numerous instances as delineated above, amounts to mistake apparent on the face of record.
The CESTAT, while dismissing the application for rectification of mistake, has gravely erred in failing to take note of the same, despite making a note of the argument by the counsel for the applicant therein, that the plea invoking extended period has been iterated more than once in the order of the Adjudicating Authority. In such a circumstance, we can not uphold the impugned order and thus, the impugned order is set aside - appeal allowed - Matter restored before CESTAT - decided in favor of appellant.
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2020 (3) TMI 378
Principles of natural justice - opportunity for cross-examination denied - alleged evasion of tax - HELD THAT:- There are no merit in this appeal. The question of cross-examination of petitioner No.2 by himself and the adjudicating authority does not arise. Even otherwise, the rights of the petitioners are protected. The liberty is granted to the petitioners to adduce any evidence to substantiate their stand and the respondents - authority was also directed to consider the same and pass appropriate orders. Therefore, there is no denial of the rights of the petitioners.
The order of the learned Single Judge is sufficient and well reasoned to protect the legal rights of the petitioners. They are entitled to make a statement or otherwise as held by the learned Single Judge - there are no good ground to consider the case of the petitioners - appeal dismissed.
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2020 (3) TMI 377
Interest on refunds - Revenue rejected the claim with regard to the interest on the refund amount on the ground that no effective steps were taken by the petitioners subsequent to the order passed by the assessing authority - HELD THAT:- The assessing authorities orders are of the year 2006 and the respective writ petitions are filed in the year 2017. Even if the petitions are not entertained on the ground of delay, on equity, the petitions are to be considered as the matters pertain to demand of tax amount. Admittedly, the delay cannot come to the aid of the respondents. The respondents have retained the money which belongs to the writ petitioners. Therefore, once the learned Single Judge has ordered for refund of the tax amount, necessarily, interest should follow. The order of the learned Single Judge is not challenged by the respondents – authorities. It is only on the question of interest that these appeals are filed.
It is only just and appropriate that the interest be awarded on the refund amount as ordered by the learned Single Judge in both the appeals - respondents are directed to pay the interest at the rate as applicable for the respective periods - Appeal disposed off.
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2020 (3) TMI 264
Audit/verification of documents/records - Rule 5(A) of Service Tax Rules, 1994, read with Section 174(2)(e) of the Central Goods and Services Tax Act, 2017 - petitioner states that under Section 174 (2)(e) of the CGST Act, 2017, which is the repeal and saving clause, Rule 5A of the Service Tax Rules, 1994 has not been saved and having regard to the fact that the said provision only saves a proceeding that has already been instituted at the time of repeal or omission of the 1994 Act and not thereafter, the respondents cannot be permitted to conduct an audit/verification of the accounts of the petitioner for the relevant financial years.
HELD THAT:- No interim relief of the nature as prayed for, can be granted without calling for a reply by the respondent. We are also not persuaded to come to the aid of the petitioner right away for the reason that it has taken almost three months reckoned from 01.11.2019, to approach the court for relief and that too at the nick of the time.
Issue notice - List for consideration before the roster Bench on 04.03.2020.
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2020 (3) TMI 155
Filing of revised return - time limit for filing of revised return - Rule 7B of Service Tax Rules-1994 - HELD THAT:- On perusal of the Rule 7B of the Rules-1994, it permits the assessee to file revised return in form ST-3, in triplicate, to correct a mistake or omission, within a period of ninety days from the date of submission of return under Rule 7. Rule 7 prescribes for return to be filed under Form ST-3. As per rule 7B, it appears that the assessee can revise the return filed under Rule 7 within a period of 90 days from the date of submission of the original return under Rule 7 of the Rules 1994. Rule 7B only permits the assessee to revise the mistake or omission in the return filed under Rule 7 within a period of 90 days. If the assessee finds any mistake in the form ST-3 file under Rule 7 of the Rules1994, he can revise the same in multiple documents within prescribed period. The intention of the framing of the Rule is to revise return Form ST-3 filed under Rule 7 of the Rules-1994.
The stand taken by the respondents that once option is exercised to revise the original return then the assessee cannot file revised return again within prescribed time period under Rule 7B of the Rules-1994 is not tenable. ACES portal not allowing the petitioner to revise the Form ST-3 for the second time within prescribed period resulting into technical glitches is contrary with the provisions of Rule 7B of Rules-1994.
In the opinion of the the Court, the respondents have failed to consider the aspect of technical glitches to reject the claim of the petitioner on the ground that the petitioner has no option to revise the return in Form ST-3 once the original return is revised by the petitioner - the respondents are hereby directed to consider the claim of the petitioner for the amount of ITC of ₹ 99,46,810/- manually under Rule 7B of the Rules-1994, so as to enable the petitioner to take advantage of the order dated 07.02.2020 to revise the Form Tran-1 to be filed online on or before 31.03.2020.
Petition disposed off.
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2020 (3) TMI 154
Maintainability of appeal - Classification of services - Whether or not, the Boards and the University are educational institutions. If the Boards and University are found to be educational institutions, the services provided to them are exempt?
Maintainability of appeal - HELD THAT:- Against an order passed by the Appellate Tribunal, appeal lies to the High Court; however, the order which is subject matter of challenge should not relate to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment. Since classification of goods or services has a direct relation with the rate of duty, an appeal against an order of the Appellate Tribunal relating to a classification dispute would also lie before the Supreme Court and not the High Court - Since an appeal against a matter which relates to the determination of a question having a relation to the rate of duty or value of goods for the purposes of assessment lies to the Supreme Court and not to the High Court, this court ordinarily, would not entertain such a dispute in exercise of powers under article 226 of the Constitution of India.
Whether the dispute involved in the present cases is a classification dispute? - HELD THAT:- A dispute can be said to be a classification dispute provided it involves a question regarding the entry under which particular goods or services fall. In the present cases, insofar as the nature of the services is concerned, there is no dispute. The question involved in these cases is whether the institutions to which the services are supplied by the petitioners are educational institutes. In the opinion of this court, the question as to whether an institution is an educational institution or not, is strictly speaking, not a classification dispute - Moreover, in both these cases there is no dispute on facts. On a perusal of the impugned show-cause notices, it is apparent that based on admitted facts, the only dispute raised is a purely legal issue, namely, whether the institutions to which the services are supplied by the petitioners are educational institutions. Moreover, the relevant material on the basis of which such question can be decided is already on record.
This court is of the view that the decision of the Supreme Court in UNION OF INDIA & OTHERS VERSUS COASTAL CONTAINER TRANSPORTERS ASSOCIATION & OTHERS [2019 (2) TMI 1497 - SUPREME COURT] would not be applicable to the facts of the present cases, inasmuch as, in that case the court had firstly found that the dispute involved in the case was a classification dispute; and secondly, that even from the contents of the show-cause notices, it could not be said that there are no factual disputes; whereas the present cases do not involve any classification dispute, nor do they involve any disputed questions of fact.
Educational services or not - HELD THAT:- The main ground on which the petitioners are sought to be denied exemption from service tax in respect of the services provided by them to the Boards/University is that according to the respondents, the Boards/University are not educational institutions - The facts are not in dispute, inasmuch as the nature of services provided by the petitioners in Special Civil Application No.20748 of 2018 are examination related activities like Barcode Scanning, Printing, OMR Scanning, Data Entry, etc. provided to the service recipients mentioned in the impugned show-cause notice and in case of the petitioners in Special Civil Application No. 7414 of 2019, the services provided are in the nature of rent-a-cab in connection with the examinations held by the concerned Boards/University. It is an admitted position that such services are exempted under section 66D(l) of the Finance Act, 1994 as well as under Mega Exemption Notification No. 25/2012-ST dated 20.06.2012 if such services have been provided to the “educational institutions”. The petitioners have not paid service tax on the services provided to the above institutions claiming exemption under serial No. 9 of Mega Exemption Notification No. 25/2012-ST dated 20.06.2012, as amended, applicable to the services provided to educational institutions.
Whether the Boards and University to whom services are provided by the petitioners are “educational institutions”? - HELD THAT:- Notification No.06/2014 - Service Tax dated 11.07.2014 defines “educational institution” to mean an institution providing services specified in clause (l) of section 66D of the Finance Act, 1994. Therefore only those entities which provide such services would qualify under the term “educational institution” - It appears that according to the respondents the term “educational institution” envisages only those institutions which actually enroll students and impart education. In paragraph 7.6 of the show-cause notice, it has been stated that on examining the functions and duties of the above said Boards/University, it appears that these Boards/University are functioning as organisations which are entrusted with the work of creating more schools/colleges/institutes under their affiliation, to prepare the syllabus of education for such institutes, to conduct the academic tests and exams, to appoint examiners/supervisors for smooth conduct of examination, to declare the results of such examinations etc. On a broader aspect, these University/Boards work more like managerial organisations to plan the syllabus of education and conduct of examination for institutes affiliated under them. For this purpose, the Boards/University procure services of other service providers for such examination related and result processing services.
Whether the narrow meaning sought to be assigned to the word “education” by the respondents is required to be adopted, namely only those institutions which directly impart education to the students; or a broader meaning which includes even those institutions which are connected with the education of those students? - HELD THAT:- This court is of the opinion that the word “education” cannot be given a narrow meaning by restricting it to the actual imparting of education to the students but has to be given a wider meaning which would take within its sweep, all matters relating to imparting and controlling education. Examination is an essential component of education as it is one of the major means to assess and evaluate the candidate's skills and knowledge, be it a school test, university examination, professional entrance examination or any other examination. - Thus, education would mean the entire process of learning, including examination and grant certificate or degree or diploma, as the case may be and would not be limited to the actual imparting of education in schools, colleges or institutions only. Unless the School Boards hold examinations, the education of school students would not be complete, so is the case with college students, whose education would be complete only when the University conducts examinations and awards degrees or diplomas.
Once the Boards/University to whom services have been provided by the petitioners, are held to be educational institutions, the very substratum of the impugned show-cause notices is lost inasmuch as the show-cause notices are premised on the allegation that the service recipients namely the Boards/University referred to hereinabove are not educational institutions and, therefore, the services rendered by them do not fall within the negative list of services as provided under section 66D(l) of the Finance Act, 1994 and that the Board/University are not “educational institutions” as defined under clause (oa) of Entry No.2 of the Mega Exemption Notification No.25/2012-ST dated 20.06.2012 - Once it is held that the service recipients are educational institutions, the impugned show-cause notices are rendered unsustainable.
Extended period of limitation - HELD THAT:- When the Department itself was of the view that the services provided by the petitioner in Special Civil Application No.7414 of 2019 to the Boards/Universities were covered by the Mega Exemption Notification and were therefore, exempt, the petitioners in both these petitions were equally entitled to hold such a view. Therefore, it cannot be said that the petitioners had, with an intention to evade payment of service tax, misstated that the organisations to which they had provided services are “educational institutions” to claim incorrect and ineligible exemption. The larger period of limitation, therefore, could not have been invoked in the facts and circumstances of the present cases.
Petition allowed - decided in favor of petitioner.
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2020 (3) TMI 153
Club and Association service - It has been alleged that since the petitioner was an incorporated company and therefore, the services rendered by it cannot be said to be excluded from the definition of “club or association” in view of specific exclusion sub-clause (iii) to the above definition - demand of service tax - extended period of limitation- HELD THAT:- Normally, writ against show cause notices ought not to have been entertained in the 1st place. The petitioner ought to have been directed to reply to the said show-cause notice.
However, in the present writ petition an interim injunction was ordered on 16.11.2011 in M.P.No.2 of 2011 and therefore the impugned Show Cause Notice has not been adjudicated till date. Meanwhile, the Honourable Supreme Court has now given its verdict in the case of STATE OF WEST BENGAL & ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE & ORS. VERSUS M/S. RANCHI CLUB LTD. [2019 (10) TMI 160 - SUPREME COURT]. The question of law has been settled.
The proposed demand in the impugned show cause notice can no longer be sustained in the light of the above decision of the Hon'ble Supreme Court - petition allowed - decided in favor of petitioner.
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2020 (3) TMI 19
Demand of service tax from the partnership firm - appropriation of service tax by the proprietorship firm - a partnership firm was constituted and the proprietorship business was taken over by the partnership firm with all the assets and liabilities - HELD THAT:- The service tax for some period was being paid in the name of the sole proprietorship business, and not in the name of partnership firm. Subsequently the partnership firm claimed that the tax for the relevant period be treated as the tax paid by partnership firm - It is pointed out by learned counsel for the petitioner that a representation given for the same on 22.7.2019, as contained in Annexure-13 to the writ application, is still pending before the Commissioner of CGST, Central Excise & Service Tax, Ranchi, which has not yet been disposed of.
Application disposed off with the direction to respondent No.1, the Commissioner of CGST, Central Excise & Service Tax, Ranchi, to dispose of the representation of the petitioner firm, by a speaking order within a period of four weeks from the date of receipt of such representation.
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