2015 (1) TMI 862 - HC - Service Tax

Discharge of service tax liability by co-operative society - Held that - Service tax in respect of the period October 2007 to June 2012 has already been satisfied under protest, but adjudication is still to be finalised, it is made clear that, in the course of such adjudication exercise, if the authority arrives at a finding that the petitioners are not liable to satisfy service tax, the amount already satisfied by the petitioners shall be refunded at the earliest, at any rate, within one month thereafter. - Petition disposed of.

Summary

Issues:
1. Declaration of the legality of the proceedings issued by the 4th respondent and the liability of co-operative societies to pay service tax.
2. Quashing of the proceedings leading to Exts.P2 and P4.
3. Restraining the 3rd respondent from assessing the petitioner society for service tax and seeking a refund if found not liable.
4. Restraining the 4th respondent from coercive actions and directing an assessment of the petitioner society's liability for service tax.
5. Seeking other reliefs deemed fit by the Hon'ble Court.

Analysis:

Issue 1: The petitioners, co-operative societies, argued that their activities did not fall under Section 65(12)(v) of the Finance Act for attracting service tax liability. They received show-cause notices and responded with Exts.P1, P3, and P4 replies. The Court referred to judgments like Exts. P5 and P6, directing authorities to consider cases like the petitioners' regarding service tax liability and proceed accordingly.

Issue 2: The Counsel for the petitioners cited a previous judgment in favor of the petitioners in a similar case, seeking similar relief. The Court disposed of the writ petition in line with the judgment in W.P.(C) 28713 of 2014, where it was determined that the activities of the society fell within the service tax net.

Issue 3: The Court directed the petitioners to engage with the Superintendent of Central Excise to determine their liability for service tax based on their activities and relevant records. The authorities were instructed to finalize the proceedings within two months from the date of the judgment, allowing the petitioners to present their case and produce necessary documents.

Issue 4: Regarding the satisfaction of service tax for a specific period under protest, the Court clarified that if authorities found the petitioners not liable for service tax during adjudication, the amount paid would be refunded promptly, within one month from the decision.

Conclusion: The writ petitions were disposed of based on the Court's directions for the assessment of service tax liability and the refund process if the petitioners were found not liable. The judgment provided a framework for engaging with the competent authority to resolve the issue within a specified timeframe, ensuring due process and fairness in the proceedings.