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M/s. Dream Castle Versus Commissioner of Central Excise,

2015 (4) TMI 970 - MADRAS HIGH COURT

Demand of service tax - Jurisdiction error - No service provided - Held that:- The authority, after taking note of the submissions of the petitioner, and taking into account the commission received, in para 25 of the order and after verifying the invoices, came to the conclusion that DLF is the customer and the invoices raised by the noticee also confirm that the noticee received commission from the nominees of DLF - Since a finding rendered by the authority cannot be stated that it is a jurisdi .....

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n this case, the decision taken by the respondent cannot be said to be against the provision of law and there is an arbitrary action without sanction of law - Decided against assessee. - W.P.No.8443 of 2015, M.P.Nos.1 and 2 of 2015 - Dated:- 25-3-2015 - S.Vaidyanathan J For the Appellant : Mr.M. V. Swaroop ORDER Petitioner has come forward with the aforesaid prayer. 2. The case of the petitioner is that it is a proprietary concern engaged in the business of real estate consultancy and agency and .....

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titioner, the respondent has held that the entire amount received by the petitioner, even though it was disbursed to third parties and the petitioner has acted as a mere conduit for payment of funds to the identified parties, is liable to service tax without considering any of the agreements or the bank account statements or other evidence produced by the petitioner. 3. The petitioner submitted that the petitioner has been foisted with a demand of over 36 crores whereas the consideration receive .....

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tion of India. The petitioner submitted that imposing of service tax when there is no service rendered is a jurisdictional aspect which can be decided by this court without relegating the petitioner to the alternative remedy. The petitioner further submitted that the petitioner needs to have paid 7.5% of the amount determined by the original authority which is a condition precedent and there is no provision for waiver in the amended provisions of the Finance Act. The petitioner drew the attentio .....

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ictional fact wrongly. The question whether the jurisdictional fact has been rightly decided or not is a question that is open for examination by the High Coourt in an application for a writ of certiorari. If the High Court comes to the conclusion, as the learned single Judge has done in this case, that the Income Tax Officer had concluded at the jurisdiction by deciding a jurisdictional fact erroneously, then the assessee was entitled for the writ of certiorari prayed for by him. It is incompre .....

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XES AND ANOTHER (AIR 1967 SC 1401) and the relevant portion is extracted below:- "5. The appellant Company filed a petition under Article 226 of the Constitution of India in the Patna High Court for directions or orders or writs, including a writ in nature of certiorari calling for the records and quashing the order of the Assistant Commissioner. By the petition the jurisdiction of the Assistant Commissioner to make the assessment and the demand of tax in respect of stockyard sales were que .....

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really does no more than try to check in advance the points which the appellant Company is seeking to raise in this appeal. Whether one looks at the matter from the point of view of the appeal proper or from the point of view of the preliminary objection raised before us, the question is the same, namely, whether the High Court ought in this case to have exercised jurisdiction and if it took jurisdiction whether any settled principle governing Article 226 would have been departed from. 8. The po .....

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cts have to be found on evidence. The High Court, therefore, leaves the party aggrieved to take recourse to the remedies available under the ordinary law if they are equally efficacious and declines to assume jurisdiction to enable such remedies to be bypassed. To these there are certain exceptions. One such exception is where action is being taken under an invalid law or arbitrarily without the sanction of law. In such a case, the High Court may interfere to avoid hardship to a party which will .....

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powers of extra-ordinary jurisdiction under Article 226 of the Constitution of India and set aside the impugned order. The petitioner further submitted that he has already paid a sum of ₹ 77,00,000/= towards service tax and if the impugned order, which is legally not sustainable, has got to be challenged before the appellate authority, the petitioner will have to pay 7.5% amount in terms of provisions of the Act. 6. Heard the learned counsel for the petitioner. 7. The authority, after taki .....

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failed to disclose the full facts and di not inform about the receipt of commission towards rendering real estate agent services to the Department nor disclosed the same in the returns filed with the department with an intent to evade payment of Service Tax. The department would not have known the facts but for the verification of records and documents during investigation conducted by the officers of Service Tax Commissionerate. The various judgments relied upon by the noticee with regard to i .....

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s - DLF relationship indicates clearly that there exist suppression of fact which would have gone unnoticed but for the verification of records and documents during timely investigation conducted by the officers of Service Tax Commissionerate. The Hon'ble Supreme Court in the case of CCE Vs Mehta and Co, (2011(264) ELT 481 (SC)) held that cause of action arises on the date on which the relevant facts came to the knowledge of the department. In this case, only after initiation of investigatio .....

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,194/= are confirmed under proviso to Section 73(1) of the Finance Act, 1994. 31.As regards the impression of penalty, the noticee contended that since there is no question of payment of service tax, there is no question of demand of interest and imposition of penalty and since there is no suppression of value of taxable service from their end, penalty under Sec.78 cannot be imposed. As discussed in the preceding paragraphs, the failure and contraventions on the part of the assessee is establish .....

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