2017 (12) TMI 685 - HC - Service Tax

Writ of Prohibition - tour operator services and/or travel agent services - if the petitioners have rendered tour operator services and/or travel agent services to other than those, who are either Haj or Umra pilgrims, the second respondent has to examine as to how such transactions have to be assessed? - Services rendered to Indian Haj and Umra pilgrims, who go to Saudi Arabia - petitioners case is that such services are fully exempt by relying upon the Notifications dated 30.10.2009 and 20.8.2014 - Held that - This Court does not wish to express anything on the merits of the matter and it is made clear that a decision would be taken by the second respondent in accordance with law after perusal of the documents produced by the petitioners. It is reiterated that on production of the records, the second respondent shall examine as to what are the types of services rendered by the petitioners and in case the second respondent is of the opinion that the services rendered by the petitioners to the Indian Haj and Umra pilgrims are liable for service tax, it is needless to state that the second respondent shall afford an opportunity of personal hearing by way of issuing a show cause notice, so that the petitioners will be able to canvass the contentions raised before this Court in these writ petitions. This Court holds that the prayer sought for in these writ petitions is premature - petition dismissed - decided against petitioner.

Summary

Issues:
1. Whether the petitioners are entitled to a Writ of Prohibition to prevent the second respondent from conducting an inquiry or assessment based on the documents requested.
2. Whether the services provided by the petitioners are exempt from service tax under specific Notifications.
3. Whether the writ petitions are premature and the petitioners are obligated to produce the requested records for examination.

Issue 1:
The petitioners sought a Writ of Prohibition to stop the second respondent from conducting an inquiry or assessment based on the documents requested. The petitioners argued that the services they provided were fully exempt from service tax, citing specific Notifications issued by the Central Board of Excise and Customs. They relied on a Delhi High Court decision that declared certain Service Tax Rules as ultra vires the Finance Act. The Department contended that the writ petitions were premature, and the second respondent needed to examine the documents to determine the taxability of the services provided. The Court held that issuing a Writ of Prohibition at that stage would be premature, and the petitioners were required to produce the records for examination.

Issue 2:
The petitioners claimed that the services they provided were exempt from service tax under specific Notifications issued by the Central Board of Excise and Customs. They argued that the second respondent had no jurisdiction to request the documents as the services were fully exempt. The Department contended that the petitioners' reliance on a Delhi High Court decision was misplaced, as it pertained to different services provided to foreign tourists. The Court noted that an adjudication process was necessary to determine the applicability of the Delhi High Court decision, and the second respondent needed to examine the documents produced by the petitioners to make a decision on the taxability of the services.

Issue 3:
The Court considered whether the writ petitions were premature and if the petitioners were obligated to produce the requested records for examination. The Department argued that without examining the documents, the second respondent could not be prohibited from exercising statutory powers to determine the taxability of the services provided. The Court held that the writ petitions were premature, and the petitioners were required to cooperate with the proceedings by producing all records. It emphasized that the second respondent must afford the petitioners an opportunity for a personal hearing if the services were found to be liable for service tax. The Court dismissed the writ petitions, directing the petitioners to appear before the second respondent within two weeks to produce the records.

This detailed analysis of the judgment covers the issues involved comprehensively, outlining the arguments presented by the parties and the Court's reasoning in reaching its decision.