2010 (7) TMI 477 - HC - Service Tax

Demand of service tax, interest and penalty - assessee availed services of Goods Transporter Operator - assessee was liable to pay Service Tax as recipient of such services - Held that - till the point of time Section 73 of the Finance Act, 1994 came to be substituted w.e.f. 10-9-2004 provisions of the said section could not be made applicable despite retrospective amendment in Sections 68 and 71A of the Finance Act, 1994. In these circumstances, admittedly, the assessee could not be faulted with for not having filed a return after getting himself registered. More particularly, when one considers the language employed in the Proviso below sub-section (1) of Section 68 and the provisions of Section 71A of the Finance Act, 1994, it is not possible to state that the language of the Statute is so clear that any default can be fastened on the respondent-assessee - Appeal is dismissed

Summary

Issues:
1. Whether the Tribunal erred in holding the show cause notice as barred by limitation?
2. Whether the Tribunal erred in applying certain decisions for allowing the appeal?
3. Whether the Tribunal erred in determining the recipient of services of a goods transport operator?
4. Whether the Tribunal erred in allowing the appeal with consequential reliefs?
5. Whether the Tribunal erred in passing a cryptic order?

Analysis:

1. The appellant-revenue contended that the respondent-assessee availed services of a Goods Transport Operator and was liable to pay Service Tax. The order demanded recovery of Service Tax, interest, and penalties. The Tribunal ruled in favor of the assessee based on two Apex Court decisions. The appellant argued that the show cause notice issued in 2004 was not barred by limitation due to an amendment in Section 73. The appellant also claimed that the Tribunal's reliance on the Apex Court judgments was misplaced post the amendment. The appellant sought restoration of the matter to the Tribunal due to a cryptic non-speaking order.

2. The liability to pay Service Tax was initially on the service provider, not the recipient, until amendments were introduced. The introduction of Section 71A shifted the liability to the service recipient to file returns. The Apex Court noted that without Section 71A, no levy could be demanded. The amendment in Section 73 in 2004 did not make its provisions applicable retroactively. The appellant argued that the respondent was not at fault for not filing returns based on the unclear language of the statute.

3. The Tribunal's order was deemed free of infirmity, and no substantial question of law arose from it. Consequently, the Tribunal's decision was upheld, and the appeal was dismissed. The appellant's contentions regarding the show cause notice, amendments, and liability of the respondent were not found to be valid. The Tribunal's decision was considered appropriate, and no interference was warranted based on the existing legal framework.

This detailed analysis of the judgment provides a comprehensive understanding of the issues raised, arguments presented, and the final decision rendered by the Gujarat High Court.