2014 (12) TMI 1042 - AT - Service Tax

Waiver of pre deposit - demand based on original return ignoring the revised return - Port Service, Goods Transport Agency Service - Held that - Rule 7B itself does not require any reason to be given while filing the revised return. In fact it is not required since the assessing officer has power to scrutinize the report and call for records and documents in case he has any doubts or needs any clarification. Therefore when a revised return is filed, the proper course would have been to call the assesses and ask them to explain why the difference has arisen and why the taxable value was -not shown correctly. Instead the revised return has been ignored and the tax demand has been confirmed ignoring the revised return completely. We feel that there is no case for a tax demand in this case at all. Accordingly we consider that the appellant has made out a case for complete waiver of pre-deposit and stay against recovery - stay granted.

Summary

Issues:
1. Appellant's liability for service tax based on original versus revised Service Tax Return.

Analysis:
The judgment revolves around the issue of the appellant's liability for service tax based on the original versus revised Service Tax Return filed by them. The appellant, engaged in providing taxable services, had initially paid service tax for a specific period and later filed a revised return correcting the declared value of taxable service. The Commissioner, however, concluded that the appellant needed to pay service tax based on the amount shown in the original return, disregarding the revised return, as the appellant did not provide any explanation for the difference in values. The appellant argued that Rule 7B, governing the revision of returns, does not mandate providing reasons for filing a revised return. The Tribunal agreed with the appellant, highlighting that the rule does not require a reason to be given, as the assessing officer can seek clarification if needed. The Tribunal criticized the Commissioner for ignoring the revised return and confirming the tax demand solely based on the original return. Ultimately, the Tribunal found no grounds for a tax demand, waived the pre-deposit requirement, and granted a stay against recovery for 180 days.

In conclusion, the judgment emphasizes the importance of considering revised returns in tax assessments and the authority's duty to seek clarification if discrepancies arise. It underscores the procedural fairness and the need to follow the rules governing return revisions without imposing additional requirements beyond what is specified. The Tribunal's decision to waive the pre-deposit and grant a stay against recovery reflects a just approach to resolving the dispute and ensuring the appellant's rights are protected in the tax assessment process.