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2015 (4) TMI 464 - HC - Service TaxRenting of Immovable Property Services - Invocation of extended period of limitation - Suppression of facts - Held that - Any finding by the Court at this stage is likely to be prejudicial, either the petitioner-BDA or the Service Tax Authority. At a stage where demand-cum-show cause notice has been issued to the BDA, various grounds have been indicated in the show cause notice as to why the Service Tax Authority are seeking to apply the extended period of limitation to the facts and circumstances of the case. Further, in view of the fact that although it appears that an agreement was signed between the BDA and M/s. Unitech Ltd. on 14.3.2008, the same was admittedly registered only on 30.9.2010 and the consequences thereof are the matters to be determined in the light of the submissions that may be advanced by the petitioner in course of such determination. In view of the judgment of Collector of Central Excise, Hyderabad (1989 (2) TMI 116 - SUPREME COURT OF INDIA), the issue itself, i.e. as to whether the extended period of limitation would apply, is yet to be determined by the adjudicating authority itself at the first instance. Consequently, without expressing any finding on the issues raised in course of the argument, we dismiss the writ application but allow the petitioner a further period of 30 days to file show cause reply and also to participate in such proceeding. The petitioner is at liberty to raise all such contentions and the Commissioner shall deal with the matter strictly in accordance with law without in any manner being influenced by any observation made hereinabove and reach in an independent conclusion both on fact and legal issues raised. - Decided in favour of assessee.
Issues Involved:
1. Challenge to the demand-cum-show cause notice dated 22.9.2014. 2. Conditions precedent for invoking the extended period of limitation. 3. Classification of the transaction under "Renting of Immovable Property Services". 4. Suppression of facts by the petitioner. 5. Jurisdiction of the writ court to entertain the petition. Detailed Analysis: 1. Challenge to the demand-cum-show cause notice dated 22.9.2014: The petitioner, Bhubaneswar Development Authority (B.D.A.), challenged the demand-cum-show cause notice dated 22.9.2014, asserting that the notice was issued without proper jurisdiction. The petitioner argued that the premium received prior to 1.7.2010 could not be subjected to service tax as the taxable service "Renting of Vacant Land" was introduced only on that date. The petitioner relied on the judgment of the Calcutta High Court in Infinity Infotech Parks Ltd. v. Union of India to support their contention. 2. Conditions precedent for invoking the extended period of limitation: The petitioner contended that the conditions for invoking the extended period of limitation were absent, as the Commissioner had not properly applied his mind to the question of whether these conditions existed. The petitioner argued that the show cause notice amounted to a wrongful invocation of jurisdiction and should be quashed. The Service Tax Department, on the other hand, argued that the facts indicated suppression of material information by the petitioner, justifying the invocation of the extended period of limitation under Section 73(1) of the Finance Act, 1994. 3. Classification of the transaction under "Renting of Immovable Property Services": The Service Tax Department classified the transaction between B.D.A. and M/s. Unitech Ltd. under "Renting of Immovable Property Services." The lease deed dated 30.09.2010 indicated that the land was leased for development and construction of commercial buildings, and the consideration amount of Rs. 52.75 Crore was received by B.D.A. on 14.3.2008. The Department argued that the nature of the transaction was a lease or rent, not a sale, and thus fell under the taxable service category as per Section 65(105)(zzzz) of the Finance Act, 1994, and subsequent amendments. 4. Suppression of facts by the petitioner: The Department alleged that B.D.A. had suppressed facts regarding the provision of "Renting of Immovable Property Service," "Commercial or Industrial Construction Service," "Security Service," and "Advertisement Service" to M/s. Unitech Ltd. B.D.A. had not paid any service tax on the amounts received and had failed to declare these details in their statutory ST-3 Returns for the period 2010-11. This suppression was viewed as willful, with the intent to evade payment of service tax, justifying the extended period of limitation for recovery. 5. Jurisdiction of the writ court to entertain the petition: The Service Tax Department argued that the writ court should not entertain the petition as an ordinary remedy was available, and judicial discipline required allowing the department to reach its own conclusion. The Department cited the Supreme Court judgment in C.C.T. Orissa & Ors. v. Indian Explosives Ltd., which emphasized that the High Court's intervention at this stage could prejudice the statutory authorities' interests. The Court noted the Supreme Court's judgment in Collector of Central Excise, Hyderabad v. M/s. Chemphar Drugs and Liniments, which established that the extended period of limitation required proof of fraud, collusion, willful misstatement, or suppression of facts. Conclusion: The Court dismissed the writ application, allowing the petitioner an additional 30 days to file a show cause reply and participate in the proceedings. The Court emphasized that the adjudicating authority must independently determine whether the extended period of limitation applied, without being influenced by any observations made during the hearing. The petitioner was granted the liberty to raise all contentions during the adjudication process, and the Commissioner was directed to deal with the matter strictly in accordance with the law.
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