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Damco India Pvt. Ltd. Versus The Union of India And Others

2015 (9) TMI 837 - BOMBAY HIGH COURT

Quashing of Show cause notice - Jurisdictional error - Held that:- Petitioner will have to demonstrate that it is not rendering any services within the meaning of Finance Act 1994, much less the 'business support services'. It is the allegation in the show cause notice that the shipping lines / airlines are approached by the Petitioner - Assessee after getting inquiry from the clients and that is how the space or the slot is booked. That there is no such client who had approached the petitioner .....

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15 - Dated:- 1-9-2015 - S. C. Dharmadhikari And B. P. Colabawalia, JJ. For the Petitioner : Mr Vikram Nankani, Sr. Counsel with Mr Anupam Dighe and Mr Ajinkya Patil For the Respondent : Mr Pradeep S. Jetly with Mr Jitendra B. Mishra ORDER P. C. 1. By this Petition under Article 226 of the Constitution of India, what the Petitioner essentially prays is to quash and set aside the show cause notice dated 24th April 2015. The prayer is that this show cause notice has been issued without the authorit .....

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with them while passing the order in furtherance of the show cause notice. That according to the learned counsel for the Petitioner, is an erroneous premise on which the Authority has proceeded. Reliance is placed on the judgment of the Hon'ble Supreme Court in the case of Raza Textiles Ltd. v/s Income Tax Officer, Rampur, reported in (1973) 1 SCC 633. 2. Our attention is invited to pages 9495 of the paperbook wherein the sample invoice issued to certain parties depict the nature of the ser .....

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olidation agents, customs house agents etc. are not paying service tax on the profit earned in selling of space for import / export to the importers / exporters on behalf of the Shipping lines / Airlines. The excess amount of freight as charged i.e. the difference between freight charged to the shippers and paid to the shipping companies is nothing but additional consideration received for the services provided to the shippers as an agent for the Shipping Lines / Airlines and are covered under t .....

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ort Services'. The Petitioner is registered with Service Tax Department and that is why it is further alleged that the Petitioner - Assessee was approaching the shipping lines / air lines only after getting inquiry from the client and therefore they were acting on behalf of the clients when they book the space or make available slots in the shipping lines / airlines. Mr Nankani submits that the position is quite to the contrary and irrespective of any bookings received from the customer as a .....

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tion and then allow the Petitioner, if need be, to challenge it in this very Writ Petition. 4. It is not possible to agree with Mr Nankani for more than one reason. The Supreme Court in the case of Raza Textiles Ltd . (supra) was considering a case where the Income Tax Officer directed the Appellant - Raza Textiles Ltd. to pay a certain sum as tax on the sum of ₹ 2,00,000/- remitted by it as selling commission to an Indonesian party. The ITO rejected the contention of the appellant that th .....

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as no liability on the Appellant to deduct tax at source. A Division Bench, in Letters Patent Appeal, held that there was material before the ITO to hold that the Jakarta party were nonresidents. The Division Bench held that the ITO has jurisdiction to decide the question either way and that is why it cannot be concluded that he assumed jurisdiction by a wrong decision on the question of residence. 5. In Raza Textiles Ltd. (supra), learned Single Judge of the High Court came to the conclusion th .....

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l proposition but its application will depend on the facts and circumstances of each case. 6. In the present case, we are concerned with the show cause notice and demand notice and which has or contains certain allegations. These allegations may not be correct and that can be pointed out by the Petitioner by appearing before the Adjudicating Authority. The Petitioner will have to demonstrate that it is not rendering any services within the meaning of Finance Act 1994, much less the 'business .....

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