TMI Blog2005 (8) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, to the extent necessary for the purpose of this writ petition, are that the 2nd respondent issued show cause notice dated 3-1-2005 calling upon the petitioner to show cause as to why :- I. An amount of Rs. 1,38,95,128/- should not be paid by them towards service tax on the amounts received by them during the period from 1-7-2003 to 31-1-2004, on account of providing taxable services under proviso to Sec. 73(1) of the Finance Act, 1994. II. Interest should not be paid by them on the amount demanded at (I) above under Sec. 75 of the Finance Act, 1994. III.A penalty should not be imposed on them under Sec. 76 of the Finance Act, 1994. IV.A penalty should not be imposed on them under Sec. 78 of the Finance Act, 1994. 3. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as a commission agent, but does not include any information technology service. Explanation .- For the removal of doubts, it is hereby declared that for the purposes of this clause, information technology service means any service in relation to designing, developing or maintaining of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer systems. Section 65(19), as amended by Finance Act, 2004 with effect from 10-9-2004, reads thus :- business auxiliary service means any service in relation to :- (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner admits that its activity falls within the purview of sub-clause (vi) of Section 65(19) of the Finance Act of 2004. They, however, contend that the activity of Registrar and Transfer Agency Service carried on by them earlier, which was hived of and transferred for valid consideration in favour of M/s. Karvy Computer Shares Private Limited with effect from 1-2-2004, did not come within the definition of Business Auxiliary Service prior to 10-9-2004. It is their case that the show cause notice dated 3-1-2005, issued by the 2nd respondent, was under the erroneous supposition that Section 65(19) of Finance Act, 2003 encompassed the nature of activity carried on by the petitioner, even prior to 10-9-2004. Petitioner also relies on the Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 65(19)(iv) of the Finance Act, 2003, that the impugned show cause notice merely demanded service tax on service charges collected by the petitioner towards such services rendered from 1-7-2003 to 31-1-2004, that the show cause notice was issued after strictly construing Section 65(19) of the Finance Act, 2003, that the functions of the Registrar and Share Transfer Agent is a service rendered which is in the nature of incidental or auxiliary support service rendered in the contract of sale of goods (securities) belonging to the client and therefore the petitioner's contention, that none of the clauses in the definition encompass the activity rendered by it and that it could not be brought within the purview of business auxiliary ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service and are not exhaustive. According to the Learned Assistant Solicitor General the expression Business Auxiliary Service has been defined in Section 65(19)(iv) to mean any incidental or auxiliary services and would therefore include all kinds of incidental or auxiliary services. Learned Counsel contends that the six services mentioned therein are preceded by the words such as which makes it clear that the expression any incidental or auxiliary support service would bring within its fold services other than the aforementioned six services also. Learned counsel submits that since the activity carried on by the petitioner of Registrar and Transfer Agency falls within the purview of any incidental or auxiliary support servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice on behalf of the client, from the whole of the service tax leviable thereon, under Section 66 of the Finance Act, which is received by the service provided prior to 10-9-2004. This notification has neither been referred to in the show cause notice issued by the 2nd respondent on 3-1-2005 nor in the counter-affidavit filed before this Court. Whether or not the petitioner is entitled for exemption under the Central Government Notification No. 25/2004, dated 10-9-2004 is for the 2nd respondent to examine and decide in accordance with law. The petitioner is said to have submitted an explanation on 14-2-2004 setting out in detail its reply to the show cause notice dated 3-1-2005. In the said explanation, the petitioner, among other issues, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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