2011 (4) TMI 1094 - HC - Service Tax

Whether Tribunal was right in law in holding that the service tax cannot be recovered based on the returns shown in the income tax returns, as the provisions of income tax requires declaration of amounts still due from the debtors, while in the case of service tax, the same has to be paid when recoveries are made Held that - assessee also contended that the amounts declared in the income tax returns cannot be made basis for levying the service tax. Therefore, the question involved in this appeal is regarding the valuation as well as the liability to pay service tax on the mount shown in the income tax returns in the case of M/s. Mangalore Refineries and Petro Chemicals Limited (2010 - TMI - 206880 - KARNATAKA HIGH COURT) , the appeal is rejected as not maintainable

Summary

Issues:
Challenge to Tribunal's order on recovery of service tax based on income tax returns, interpretation of CESTAT's decision, sustainability of CESTAT's order, valuation for service tax liability based on income tax returns, jurisdiction of High Court in adjudicating the issue.

Analysis:
The High Court addressed the appeal challenging the Tribunal's order, which held that service tax cannot be recovered based on income tax returns due to differences in declaration requirements. The substantial legal questions included the correctness of setting aside the order, interpretation of a previous case, and the sustainability of the Tribunal's decision. The key issue was the basis for levying service tax, specifically on amounts shown in income tax returns.

The appeal was filed under Section 35G of the Central Excise Act, 1944, raising a question falling outside the High Court's jurisdiction as per the exception in Section 35G. The court cited a previous case to establish that such issues are under the exclusive jurisdiction of the Apex Court under Section 35L. Consequently, the High Court rejected the appeal as not maintainable, granting the Revenue the option to approach the Apex Court for resolution.

In conclusion, the High Court directed the registry to return certified copies of the orders to the Department for a potential appeal to the Apex Court. The judgment clarified the jurisdictional limits of the High Court in adjudicating certain issues related to the Central Excise Act, emphasizing the exclusive authority of the Apex Court in deciding such matters.