TMI Blog2012 (12) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... tent to evade payment of service tax is unfounded. A notice was issued by the Office of the Commissioner, Service Tax, Kolkata dated 13 th April, 2009 calling upon the petitioner to submit copies of lease agreements including list of long term lease agreements. It prima facie appears to this Court that the requisites of the aforesaid notice dated 13 th April, 2009 were complied with. The provisions of the Finance Act, 1994 relating to the service of renting of immovable property have been amended by the Finance Act, 2011 with retrospective effect. The amendment with retrospective effect from 1 st June, 2007 makes rent per se a taxable service. Earlier in Home Solution Retail & Anr. Vs. Union of India & Ors. (2009 (4) TMI 14 - DELHI HIGH COURT), the Delhi High Court had held that rent per se was not a taxable service. Prima facie, the entire claim except for four receipts as stated above are barred by limitation. Prima facie, jurisdiction has been exercised by wrongly deciding jurisdictional facts. Prime facie the Commissioner of Service Tax has not properly applied his mind to the issue required to be addressed for invoking the extended period of limitation. There will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words one year , the words five years had been substituted. Explanation: Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be. [xxx] (2) The [Central Excise Officer) shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of service tax due from, or erroneously refunded to, such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined: [xxx] (3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chargeable to service tax or to whom erroneous refund has been made, may pay the service tax in full or in part, as he may accept to be the amount of tax chargeable or erroneously refunded along with interest payable thereon under section 75 and penalty equal to one per cent. of such tax, for each month, for the period during which the default continues, up to a maximum of twenty-five per cent. of the tax amount, before service of notice on him and inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under sub-section (1) in respect of the amount so paid and proceedings in respect of the said amount of service tax shall be deemed to have been concluded: PROVIDED that the Central Excise Officer my determine the amount of service tax, if any, due from such person, which in his opinion remains to be paid by such person and shall proceed to recover such amount in the manner specified in sub-section (1). Explanation: For the purposes of this sub-section and section 78, specified records means records including computerized data as are required to be maintained by an assessee in accordance with any law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation. From the show cause notice itself it is apparent that except in relation to the last two receipts and two other receipts one of 1 st January, 2011 and the other of 1 st March, 2011, the notice is hit by limitation, the same having been issued after expiry of one year. The question is whether the conditions precedent for invocation of the extended period of limitation existed. The reasons for invoking the extended period of time are stated in paragraphs 9 and 10 of the show cause notice, which are set out herein below for convenience: 9.0 Here the said assessee did not disclose the material fact that they engaged in providing taxable services and suppressed the above facts with intension to evade the payment of Service Tax on Renting of Immovable Property Service . Thus, the said assessee has failed to comply with the requirement of statutory provisions of the said act and the said rules and have willfully suppressed the facts of providing/receiving the said services with intent to evade payment of Service Tax. Had the audit tem not visited the premises of the said assessee and unearthed the material fact, the said assessee would have been continuing the evasio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service of renting of immovable property have been amended by the Finance Act, 2011 with retrospective effect. The amendment with retrospective effect from 1 st June, 2007 makes rent per se a taxable service. Earlier in Home Solution Retail Anr. Vs. Union of India Ors. reported in 2009 (37) E.L.T. 209 (Del.), the Delhi High Court had held that rent per se was not a taxable service. The interim orders as prayed for by the petitioner have vehemently been opposed on behalf of the respondents. The respondents have contended that the petitioner was liable to pay service tax during the period in question, which they have not done. The CERA Audit Team which had visited the premises of the said assessee to unearth the loss of revenue allegedly detected evasion. As there was loss of revenue, the extended period has, according to Mr. Roy Chowdhury, rightly been invoked. There has been contravention of the provisions of Chapter V of the Finance Act and the Rules made thereunder. The provisions of Section 73(1) of the Finance Act are in pari materia with Section 11A of the Central Excise Act, 1944, which is set out herein below for convenience: Section 11A Recovery of dutie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax. The petitioner was duly registered with effect from the year 2007. The dispute is only with regard to service tax allegedly payable on the premium received during the period in question. Prima facie there is substance in Mr. Mittal's submission that in view of the Delhi High Court judgment in Home Solution Retail (Supra) holding that service tax was not payable on rent of immovable property per se, the petitioner was not liable for rent on premium. In any case, prima facie there was some confusion as to whether renting per se was taxable for which the law had to be amended. The petitioner was under the impression that no service tax would be payable on premium and/or salami, on its interpretation of the law, which was a possible interpretation accepted by the Delhi High Court in Home Solution Retail (supra). The next question is whether this Court should at all interfere with a show cause notice. It is well settled that existence of an alternative remedy is not in itself a bar to entertaining a writ petition. A writ petition can certainly be entertained when a notice is impugned as without jurisdiction. There can be no dispute that a question of limitation is a questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons for the belief, but not the sufficiency of the reasons, will be justiciable. The expression therefore predicates that the Income Tax Officer holds the belief induced by the existence of reasons for holding such belief. In other words the Income Tax Officer must on information at his disposal believe that income has been under-assessed by reason of failure fully and truly to disclose all material facts necessary for assessment. Such a belief, may not be based on mere suspicion . It must be founded upon information. On a parity of reasoning where the Commissioner finds that there are reasons to believe that service tax has not been levied or paid or has been short-levied or short paid or erroneously refunded by reason of fraud; or collusion; or wilful mis-statement; or suppression of facts; or contravention of any of the provisions of this chapter or of the rule made thereunder with intent to evade payment of service tax by the person chargeable with the service tax or his agent, the Commissioner is bound to disclose the reasons for formation of such belief. Be it noted that mere contravention of provision of Chapter V or Rules framed thereunder does not enable the Service ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
