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Service Tax - Case Laws
Showing 41 to 60 of 166 Records
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2014 (9) TMI 813
Waiver of pre-deposit - disallowance of Cenvat credit - various input services for construction of the airport and the passenger terminal building - Held that:- Insofar as input services used in respect of hotel construction prima facie since that contractor had availed benefits under the conditional Notification No. 1/2006 prima facie, availment of Cenvat credit by the petitioner appears unauthorized. Similar disentitlement prima facie applies in respect of input services in relation to construction of Fuel farm; on ATF fuel and credit on Volvo chassis. Insofar as ineligible input Service Tax credit of ₹ 4,00,83,247/-, the finding is that these input services were not established to have been utilized in any output service. Insofar as the disallowed component of ₹ 2,60,00,996/- the finding is that capital goods credit taken on goods used in the construction of hotel could not be availed by the petitioner since the contractor who provided the commercial or industrial construction service in relation to the hotel had availed benefits under the conditional Notification No. 1/2006; the dispute on this aspect is of ₹ 2.04 crores.
Prima facie, the petitioner appears to have an arguable case in relation to the quantum of ₹ 10,81,22,098/- i.e. in respect of the 16 input services pertaining to the construction of the airport. These services appear to have a more direct and proximate nexus to construction of the airport than to the eventual output service provided from the completed airport, by the petitioner. - stay granted partly.
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2014 (9) TMI 783
Refund of service tax - Banking or Financial Service - primary authority rejected the claims for refund on the ground that provisions of Notification No. 22/2006-ST were inapplicable as also on the ground that the some claims were barred by limitation - claim of the assessee based on Notification 22/2006-ST was accepted by the appellate Commissioner - Held that:- The power of the appropriate legislature to levy tax is subject to limitations specified in the Constitution of India. There is nothing in the Constitution which engrafts a limitation on powers of an appropriate legislature to levy a tax on rendition of ‘sovereign’ service. Service provided by RBI or the assessee under authorisation of the RBI does not also fall within the ambit of Articles 285 and 289 of the Constitution.
The power to grant exemption from the liability to tax is conferred on the Central Government under Section 93 of the Act in plenitudinous terms. Such exemption may be granted either in a specific case or in respect of a generality of cases, with or without conditions. In the exercise of such broadly conferred power, the Central Government issued Notification No. 22/2006-ST, clearly enumerating the transactions, the taxable services and the provider or recipient of services, in expressly specified circumstances, which alone are notified to be eligible to the immunity to tax. It is a settled principle and one that is too well established, that exemption Notifications are to be strictly and rigorously construed. We also prima facie discern no ambiguity in the taxable services and circumstances of such rendition/receipt which are spelt out in Notification No. 22/2006-ST. - the generic principles of agency cannot be canvassed to expand the scope of exemption to the assessee, since the exemption Notification clearly limits the grant of immunity only to taxable services provided by or to the RBI and in enumerated circumstances. - grant of refund stayed.
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2014 (9) TMI 782
Penalty u/s 77 & 78 - Construction of complex service - suppression of facts - Held that:- There is no discussion/analysis with regard to the allegation of suppression and the adjudicating authority merely jumps to the conclusion that there is suppression of facts. Obviously this is not sufficient to sustain the allegation of suppression of facts - When section 80 of the Finance Act, 1994 has been found to be invocable for waiving penalty under Section 76, it is not possible to argue that the same (i.e. Section 80) will not be invocable mutatis mutandis for waiving penalty under Section 78 ibid. Further as has been fairly conceded by the Ld. AR, there is absence of mala fide in the present case. In such a situation, even otherwise penalty under Section 78 ibid cannot be imposed in as much as penalty under that section requires means rea - Decided in favour of assessee.
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2014 (9) TMI 781
Commercial or industrial construction service - site formation service - Imposition of penalty - Held that:- As regards the commercial or industrial construction service and the site formation service, the applicant does not dispute the classification or the computation of demand and therefore, the appellant is liable to pay the entire service tax demand confirmed along with interest thereon and only the amounts actually paid by them and appropriated has to be excluded for the purposes of recovery. Therefore, we direct the appellant to make pre-deposit of entire service tax confirmed in respect of “Commercial or Industrial Construction Service” and “Site Formation and Clearance Service” along with interest thereon (excluding the amount already deposited).
Renting of immovable property - Held that:- Only if vacant land exists as it is without any building, the exclusion clause would apply. The fact that the area of the land appurtenant to the building being more than the area of the building would not make any difference. The Ld. Adjudicating authority has dealt with this matter in detail in paras 88 to 90 of the impugned order and we do not find any fault in the reasoning adopted by the adjudicating authority. Therefore, the demand of service tax in respect of the land and building rented to M/s. Reliance Industries Ltd. is prima facie, sustainable in law.
As regards the land and building rented out to M/s. Avinash Automobiles Pvt. Ltd., we note that the premises leased out consisted of a factory building and vacant land with a common compound wall and security gate. The appellant has also not been able to lead any evidence to the contrary nor did they furnish any evidence of the alleged construction on the vacant land subsequent to the lease agreement. Therefore, the Ld. adjudicating authority was correct in concluding that the consideration received for both the land and building would be leviable to service tax under the category of “Renting of Immovable Property Service”. The law was also respectively amended by the Finance Act, 2010 deeming renting of immovable property as a taxable service since 1-6-2007 which was also upheld by the Hon’ble High Court of Delhi in the above decision. In view of these judicial pronouncements, there is no doubt that the activity undertaken by the appellant is a taxable service and has always been so with effect from 1-6-2007. Further, in the Finance Act, 2012, a provision was made for waiver of penalty in case a service provider discharged the service tax liability along with interest in respect of renting of immovable property service within a stipulated time-limit. But, the appellant did not exercise their option for availing this facility. Having failed to avail of the opportunity, the contention for waiver of penalty is not acceptable. - Decided against assessee.
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2014 (9) TMI 780
Commercial training or coaching service - vocational courses - fee/charges collected from students - Held that:- Since undisputedly the coaching or training imparted by the petitioner enables its students/trainees to seek employment or undertake self-employment, directly after training or coaching, the petitioner’s endeavours fall within ‘vocational training’ covered by the exemption Notifications - Notification No. 3/2010-S.T., dated 27-2-2010, the Central Government amended earlier exemption Notifications and redefined the expression ‘vocational training institute’. While continuing the exemption granted to vocational training institute, ‘vocational training institute’ is redefined to mean ‘an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training offering courses in designated trades as notified under the Apprentices Act, 1961 (Central Act 52 of 1961)’. Admittedly the petitioner is not an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training nor does it offer courses in designated trades defined under the Apprentices Act, 1961. On this dynamics of the exemption regime post 27-2-2010, the petitioner falls outside the purview of the exempted categories of taxable services falling within Sections 65(26) and 65(27) read with Section 65(105)(zzc).
On this prima facie analysis, the petitioner is liable to remit the Service Tax for services provided on and from 27-2-2010, on the consideration received therefor - Service Tax liability on services provided and the consideration received therefor for the period subsequent to 27-2-2010 would be approximately ₹ 33.33 crore, of which ₹ 3.61 crore has already been remitted. The balance liability therefore for this period would therefore be ₹ 30 crores approximately - Partial stay granted.
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2014 (9) TMI 779
Waiver of pre deposit - Import of services - service to self - IT enabled services - Support Services for Business and Commerce - Business Auxiliary Service - Held that:- Where the service provider has no permanent establishment in India or he has no branch providing service in India but the service is received in India, tax would be paid by the receiver. Naturally what this means is that the service provider should not be having an establishment in India and then only this provision is attracted. In this case, the service provider is the branch and it cannot be said that overseas branch does not have an establishment in India assuming that it is providing the service classifiable under SSBC. This is because the branch has an establishment in India in the form of their Head Office and abroad as a permanent establishment in that country - When service is provided by a company which has a permanent establishment in India or when the service is provided by a person who has an establishment in India, provision of Section 66A do not get attracted. In this case, if it is assumed that the branch has provided SSBC, service tax demand has to be made on their establishment in India which is nothing but the assessee himself. it is nothing but a self-service and therefore a service to self is not taxable also is valid.
Further, the amount received by the appellant as a result of services rendered by the branches abroad for the appellant would be more than what they have paid to the branches, in which case, it will be a negative consideration for the service rendered by the branch to the principal. This is another complexity that gets created because of the stand taken by the Revenue that payment of salaries and other expenses of branches by the appellant is in return for consideration received. In the absence of actual earnings that arise because of the branches and its analysis by either side, no conclusion can be clearly laid down and the fact remains that this is a complexity that should not arise in a case of tax transaction like service tax. If service has been rendered and there is no consideration is determined, how can we say entire amount incurred as expenses is consideration, in the absence any enquiry or a question about the income earned and the nature thereof.
Prima facie conclusion goes in favour of the assessee on this issue at this juncture - Stay granted.
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2014 (9) TMI 778
Denial of CENVAT Credit - Works contract service - Held that:- As regards the demand of service tax for the period on or after 1.6.2007, the activity is liable to service tax under 'works contract service' and, therefore, if the appellant has discharged service tax liability under 'works contract service', the question of confirmation of the demand would not arise at all once again. The weak observation made in the impugned order is the appellant did not produce the requisite contracts so as to satisfy the adjudicating authority that they were entered into or on after 1.6.2007. This observation of the adjudicating authority is quite naive and cannot be accepted. If the adjudicating authority had any doubt about when the contract was entered into and the works executed, he could have asked the appellant to produce the copies of all the contracts which the appellant, in fact, claims that they have produced before the department. Therefore, this cannot be a ground for demanding service tax without any basis when the liability has in fact been discharged by the appellant.
As regards the denial of cenvat credit of ₹ 168.82 crores, from the records it is seen that the appellant has availed only an amount of ₹ 134.26 crores during the impugned period. If that be so, we do not understand how a disallowance of a credit not availed can be made by the Revenue. It is also on record that the appellant has in fact reversed an amount of ₹ 47.62 crores towards the capital goods and GTA and foreign consultancy services which have been appropriated in the impugned order. Therefore, the denial of cenvat credit to the extent of ₹ 168.82 appears to be not based on any documentary evidences.
Similarly, the demand of ₹ 90.78 crores being the credit actually utilized is also clearly not sustainable in law inasmuch as the said amount is already included in the cenvat credit disallowed. There cannot be any double demand towards cenvat credit, once by disallowing the entire amount of credit taken and second by a demand of credit utilized. Thus we find that there are a lot of inconsistencies/mistakes committed in the impugned order by the adjudicating authority. Therefore, the matter needs to go back to the adjudicating authority for fresh consideration. Accordingly we remand the matter back to the adjudicating authority. - Decided in favour of assessee.
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2014 (9) TMI 777
Imposition of penalty - Whether the penalty under sections 76 and 78 of the Act can be imposed simultaneously particularly in view of the fact that there was no evidence/proof to prove the allegations of suppression of fact - Held that:- Even if technically, scope of sections 76 and 78 of the Act may be different, as submitted on behalf of the Revenue, the fact that penalty has been levied under section 78 could be taken into account for levying or not levying penalty under section 76 of the Act. In such situation, even if reasoning given by the appellate authority that if penalty under section 78 of the Act was imposed, penalty under section 76 of the Act could never be imposed may not be correct, the appellate authority was within its jurisdiction not to levy penalty under section 76 of the Act having regard to the fact that penalty equal to service tax had already been imposed under section 78 of the Act. This thinking was also in consonance with the amendment now incorporated though the said amendment may not have been applicable at the relevant time - Decided partly in favour of assessee.
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2014 (9) TMI 749
CENVAT Credit - Whether input service credit availed on outdoor catering and mandap keeper services was available to the appellants or not - Held that:- There is nothing on record to show whether any expenses were recovered by the appellants from the students. Further there is no allegation has been made in the show cause notice by the revenue. Considering the submission of ld. Counsel and after going through the judgment in the case of Toyota Kirloskar Motors Pvt. Ltd [2011 (3) TMI 1373 - KARNATAKA HIGH COURT] specifically in para 8 and 11 wherein these type of activities have been given a broad interpretation and input service credit has been allowed. I find force in the contention of the appellants. Further, present facts are similar to the facts of judgement quoted by the appellants - Decided in favour of assessee.
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2014 (9) TMI 748
Imposition of penalty - Whether the appellant herein is correct in claiming that the amount of penalty of 25% of tax liability paid by him is sufficient penalty or not - Held that:- appellant has discharged entire service tax liability and interest thereof prior to issuance of show cause notice. It is also undisputed that appellant had paid 25% of the total tax amount as penalty under the provisions of section 78 of Finance Act, 1994 before expiry of 30 days of the order-in-original - appellant has vehemently urged that under Section 73 read with sub-section (1A) of the Finance Act, once show cause notice has been issued then the assessee is required to make payment of penalty. He has further argued that even before the issuance of show cause notice if the Service Tax and interest has been deposited by the assessee, still he would require to deposit the penalty as he would have known as to what penalty would be levied on the assessee, therefore, at least he should have deposited the 25% of the penalty amount within thirty days. - neither any penalty was levied by the appellant nor any quantum of penalty was fixed. Therefore, the assessee has not committed any illegality in not depositing any penalty amount - penalty levied against the assessee in excess of 25% under Sections 76 and 78 of the Finance Act, 1994, has rightly been set aside by the Tribunal. We do not find any illegality in the order of the Tribunal - Decided against the revenue.
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2014 (9) TMI 747
Refund of Service Tax - export of services - effective date of Notification No. 5/2006, dated 14-3-2006 - Prospective effect or retrospective effect - whether the refund claim should be regulated in accordance with Section 11B or not - Held that:- the matter as to whether the refund claim should be regulated in accordance with Section 11B or not is required to be considered in detail and since in any case the matter has to go back to the original adjudicating authority for sanctioning the eligible amount of refund as per the ratio of the decision of this Tribunal, I feel that it would be appropriate to leave this issue as to whether Section 11B provisions would be applicable for the purpose of limitation to the refund claim or not can be left to the original adjudicating authority for a decision after considering all the submissions that may be made before him and relevant statutory provisions as well as the precedent decisions in favour as well as against the Revenue.
Relevant date u/s 11AB - date of export or otherwise - Held that:- During the relevant period for which the refund claim relates, the service tax was leviable only when consideration was received. If the service was taxable during the time limit so rendered, date on which the service was to be taxed, cannot be the date of rendering service. Under these circumstances, the best approach and correct approach would be the one where we take the date of service as the date on which consideration is received whether it is part or full or advance. That being the position, for the purpose of calculation of date of export, in this case, in my opinion, the date on which consideration was received can form the basis.
Whether the input services in respect of which credit had been denied by the Commissioner are to be held as eligible or not - Held that:- On going through the list of services given therein and the logic adopted in that order and considering the services which are listed in paragraph 9 reproduced above, I consider that all the services which are in dispute in this case can be considered as ‘input services’ for the purpose of refund. In the result the appeal is allowed in terms of the ratios discussed above and matter is remanded to the original adjudicating authority for considering the refund claim in terms of the observations in this order - matter remanded back - Decided in favour of assessee.
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2014 (9) TMI 746
Waiver of pre-deposit - Works contract service - commercial or industrial construction service - Held that:- Since we are, prima facie, in concurrence with the conclusion of the learned adjudicating authority that the transactions entered into by the petitioner with the State of Andhra Pradesh appropriately fall within the ambit of ‘works contract’ service; since EPC contracts are classified within works contract service in clause (e) of Section 65(105)(zzzza)(ii) and the enumerated service in clause (e) does not enjoin EPC contracts executed only for commercial or industrial purposes to be within the ambit of the taxable service, we find no escape from the levy and collection of service tax, in the transactions of the petitioner which are the subject matter of the appeal - demand of service tax with interest to be deposited - stay granted towards penalty only.
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2014 (9) TMI 745
Management Consultancy services - private placement of shares of the client - Held that:- From the circular dated 9-7-2001 of the Board, the scope of the term ‘merchant banking services’ has been explained in detail. From the said circular it can be seen that merchant banking services is any service provided in relation to issue management, either by making arrangement regarding selling, buying or subscribing securities as manager, consultant, advisor or rendering corporate advisory service in relation to such issue management. The activity undertaken by the appellant squarely falls within this definition. The appellant is also registered as a merchant banker under the SEBI regulations. Therefore, the confirmation of demand under the category of ‘Management Consultancy Service’ is not sustainable under law. Since the transaction was undertaken in January, 2000 and the merchant banking activities rendered by ‘body corporate’ came under the tax net w.e.f. August, 2002, prior to that period no service tax would be leviable on merchant banking activity rendered by a ‘body corporate’ - Decided in favour of assessee.
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2014 (9) TMI 699
Refund - natural justice - opportunity of being heard - Held that:- On earlier occasions the Deputy Commissioner Service Tax, Division-VI, Mumbai-II and who has passed the impugned order Mr. S.P. Pradhan has been pulled up by this Court. He had not implemented and carried out the orders and directions of this Court which were specific and clear. We do not see how the approach of the officer in this case can be countenanced even in the present matter. When he is aware of the requirement of giving a personal hearing before a adverse order is passed, then, the impugned order shows either a uncalled for or undue enthusiasm which could safely be termed as arrogance as well. We do not approve of such a hasty course and, therefore, proceed to quash and set aside the impugned order. - matter remanded back for fresh decision.
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2014 (9) TMI 698
Extension of stay order - power of tribunal - extension beyond the period of 180 days or 365 days in all - Held that:- In the present case partial waiver of pre-deposit was granted in three stay applications in an equal number of appeals, on condition of deposit of the specified percentage of service tax assessed within the specified period, during the pendency of the appeals or for a period of six months, whichever is earlier, on 20-9-2012. The present application is filed seeking extension of that order, on the ground that the period of 180 days has elapsed from the date of the initial grant. The appeal could not be disposed of, not on account of any delay tactics adopted by the petitioners/appellants but on account of the pendency of a large number of much older appeals.
It is ordered that the waiver of pre-deposit and subject to the conditions stipulated therein, granted by the order dated 20-9-2012 (which have been fulfilled), shall operate during the pendency of the appeal. - We further order stay of all further proceedings for realisation of the balance adjudicated liability, for a period of six months or till the disposal of the appeal, whichever is earlier. - Decided in favor of assessee.
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2014 (9) TMI 697
Waiver of pre-deposit - Renting of Immovable Property - services rendered by M/s Maharashtra Industrial Development Corporation (MIDC) - whether function of state or not - Held that:- Section 20 of the Act inter alia provides for maintenance fund for the Corporation and all monies received by the corporation from the Government, all fees, costs and charges received, all monies received by way of disposal of land, buildings and other properties, movable or immovable and all monies received by way of rents and profits or in any other manner or from any other sources are credited to the fund. From these provisions of the MIDC Act, it is clear that the Corporation has its own identity apart from that of Maharashtra Government and operates independently of the Government. The receipts of the corporation are credited to its own fund and do not go the consolidated fund of the State. If that be so, the activities undertaken by it can not be construed as functions of the State.
In the present case we have noticed that the appellant is undertaking lease of land in two stages. In the first stage an agreement to lease the land to eligible applicants on payment of premium is entered into subject to construction of commercial buildings on the land and once the construction is completed, a lease agreement is entered into on payment of lease rental.
The activity undertaken by the appellant would be amenable to service tax with effect from 1.7.2010, if not earlier. As the demand involved is huge to the extent of ₹ 536 crores, no undue hardship would be caused to the appellant if some pre-deposit is ordered, especially since no prima facie case has been made out by the appellant. - stay granted partly.
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2014 (9) TMI 696
Waiver of pre-deposit - Classification of services - Business Auxiliary Service or repair and maintenance service - development of the infrastructure as agreed upon apart from furniture, fixtures, furnishings and equipment internal maintenance of common areas, maintenance, replacement of capital equipments, etc - Availing Cenvat Credit while availing benefit of abatement Notification No. 1/2006-S.T. - Held that:- The petitioner is the licensee of the premises and expenses are incurred for the upkeep and efficient use of the licensed premises. Prima facie these activities would not therefore amount to provision of Business Auxiliary Services, for or on behalf of IHC. On this analysis, the petitioner has made out a strong prima facie case, in respect of Service Tax assessed on Business Auxiliary Service.
Regarding cenvat credit - Held that:- it is asserted that since the credit availed has been reversed though subsequently, the petitioner would be entitled to the benefit of abatement under Notification No. 1/2006-S.T., which was denied by the adjudicating authority.
Prima facie case is in favor of assessee - stay granted.
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2014 (9) TMI 677
Extended period of limitation - suppression of facts - cleaning service - Held that:- After enquiry made by the department, it came out that the appellants were neither registered with the service tax department nor they have discharged service tax payable on the cleaning service. The Commissioner (Appeals) in para 7 of his order has clearly brought out suppression because they have never informed the department about taxable service. - the fact of non-payment of service tax came to the knowledge of the department only once enquiries were started. - Decided against the assessee.
As regards the argument that after the facts of non-payment of services came into the knowledge of the department, any show cause notice served beyond the stipulated period of one year is time barred, it is observed that acquiring knowledge by the Department does not take away the period of five years provided by the Law Makers in the Act itself when Department came to know of the willful suppression with intention to evade payment of duty/service tax. - Demand confirmed - Decided against the assessee.
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2014 (9) TMI 676
Waiver of pre-deposit - Cargo Handling Services - surface transport charges - Appellant contended that, they are engaged in mining of coal and the mined coal is sold on principle to principle basis to various customers, hence they are not a cargo handling agency as such no cargo handling service exists. - they contented that, surface transport charge though shown separately but it is part of the sale value of the coal. - Held that:- Even if it is accepted that the activity in question is of cargo handling service but since it is consumed captively in or in relation to manufacture and clearance of coal, it becomes part and partial of the manufacture and sale of coal.
Tthe surface transportation charges, on which service tax demanded, has been shown in the invoices as part of the sale value of the coal and on the value including the surface transportation charges, the applicant has discharged the central excise duty as well as sales tax. This clearly establishes that the value including the surface transportation charges is the sale value of coal. It is now settled law by the Hon'ble Supreme Court in Bharat Sanchar Nigam Ltd's case [2006 (3) TMI 1 - Supreme court] that in respect of sale of goods no service tax is leviable. - prima facie strong case is in favor of assessee - stay granted.
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2014 (9) TMI 675
Validity of show cause issued beyond limitation period - Non issuance of Show Cause treating the interim order of the High Court as stay - Held that:- there was no stay of any proceedings for recovery of tax in accordance with law. - The appellant (Revenue) appears to have misunderstood the interim orders of this Court and did not take any action by way of issuing a show cause notice to the assessee for recovery of service tax. It is only after the aforesaid writ petition was disposed of that the appellant issued a show cause notice to the assessee on 19-10-2005 seeking to recover Service Tax.
The interim order passed by this Court did not stay service of notice, but only prevented the appellant from recovering tax, which was assessed ex parte and also required the assessee not to file the returns. - revenue's appeal dismissed - Decided against the revenue.
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