2013 (10) TMI 1212 - AT - Service Tax

Renting of immovable property service - Ex-parte order - Held that - The factual matrix is that the appellant herein, being a municipal corporation, has not filed any reply to the show cause notice which has been received by them. The said show cause notice is raising a huge demand. The appellant, being a municipal corporation, should have been more alert and due diligence should have been done by them at least filing reply to the show cause notice, contesting the matter wherever they feel so. In the absence of reply to the show cause notice, the adjudicating authority was constrained to pass an order despite the hearing notices being given to the appellant and not being attended to. In our view, the non-cooperative attitude is very clear from the fact that they have been given personal hearing for 4 times and 2 times at their request. Be that as it may, we are still of the view that before coming to a conclusion that huge amount of Service Tax liability arises and its consequences, it requires that at least a reply, which needs to be filed, be considered by the adjudicating authority. To our mind, the issue needs reconsideration by the adjudicating authority after the reply is filed by the appellant - appellant being non-cooperative, they need to be put to some condition so that they file a reply and appear before the adjudicating authority as and when the adjudicating authority grants a personal hearing. - matter remanded back subject to pre-deposit of Rs. 30 lakhs - Decided in favor of assessee.

Summary

Issues: Service Tax liability on Renting of immovable property service, Sale of space or time for advertisement service, Supply of tangible goods service, Mandap Keeper service, Consulting Engineer service.

Analysis:

1. Service Tax Liability on Various Services:
The appellant, a municipal corporation, failed to file a reply to the show cause notice regarding Service Tax liability on multiple services. The appellant argued that they faced administrative issues causing delays in filing the reply. The Departmental Representative contended that the appellant did not cooperate, admitted to collecting Service Tax but not depositing it. The Tribunal noted the non-cooperative attitude of the appellant for not filing the reply despite multiple opportunities for personal hearings. The Tribunal emphasized the importance of filing a reply before determining the Service Tax liability and directed the appellant to submit a reply within eight weeks.

2. Non-cooperation of the Appellant:
The Tribunal observed that the appellant's non-cooperative behavior, including failure to file a reply and attend personal hearings, warranted imposing conditions for compliance. To ensure the appellant's participation, the Tribunal directed the appellant to deposit Rs.30 lakhs within eight weeks and report compliance. The adjudicating authority was instructed to consider the deposit and the filed reply for a fresh adjudication following the principles of natural justice.

3. Decision and Disposal of the Appeal:
In the interest of justice, the Tribunal disposed of the stay petition and the appeal by directing the appellant to file a reply, deposit Rs.30 lakhs, and appear before the adjudicating authority for a de-novo adjudication. The Tribunal highlighted the need for cooperation and compliance with procedural requirements in tax matters, especially for entities like municipal corporations.

This judgment underscores the significance of timely responses and cooperation in tax proceedings, emphasizing the need for procedural adherence and active participation to address Service Tax liabilities effectively.