2019 (1) TMI 325 - HC - Service Tax

Vires of rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 - section 67 of the Finance Act, 1994 - disputed period 2012-13 to 2014-15 - applicability of decision in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. 2018 (3) TMI 357 - SUPREME COURT OF INDIA - Held that - Issue Notice returnable on 23rd January, 2019.

Summary

Issues involved:
Challenge to the impugned show cause notice based on the reliance on rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 and its compatibility with the Finance Act, 1994.

Analysis:

1. The petitioners challenged the impugned show cause notice, arguing that the respondent relied on rule 5(1) of the Service Tax (Determination of Value) Rules, 2006. They cited the Supreme Court decision in Union of India v. Intercontinental Consultants And Technocrats Pvt. Ltd., 2018, where rule 5 was deemed ultra vires the then existing section 67 of the Finance Act, 1994. The petitioners contended that since the demand in question pertained to the period 2012-13 to 2014-15, the Supreme Court ruling should apply. The counsel highlighted the absurdity of the demand in the show cause notice, presenting various arguments to support their case.

2. Considering the submissions made by the petitioners' counsel, the court issued a notice returnable on 23rd January 2019. As an interim measure, all further proceedings following the show cause notice dated 31.10.2017 were stayed. Additionally, direct service was permitted in this matter.

This analysis encapsulates the key issues raised in the legal judgment, focusing on the challenge to the show cause notice and the subsequent actions taken by the court based on the arguments presented by the petitioners' counsel.