2019 (6) TMI 1329 - HC - Service Tax

Scope of University - production of details with respect to the affiliation - coverage of University under Chapter V of the Finance Act 1994 - HELD THAT - The respondents have also not through Ext.P9, finally concluded on the service tax liability of the petitioner University and interested in investigating or enquiring into the nature of activities of petitioner university by referring to the accounts, statements, other evidence the university intends to produce and thereafter the issue is determined. At the cost of repetition this Court refers to the stand of respondents that the chargeability of service tax is not finally decided by respondents and the petitioner avails the opportunity now afforded through Exts.P13 and P14 or this Court directs the Deputy Director, Kozhikode to enquire into the matter and proceed thereafter.The statement of the counsel for both sides is to the same effect and hence the writ petition is disposed of by this judgment. The petitioner University is directed to appear on 17.7.2019 before the Deputy Director, Directorate General of GST Intelligence, Kozhikode Regional Unit, Mahe House, Panicker Road, Nadakkavu P.O, Kozhikode-673011, Kerala with the records/statements it is advised to produce and participate in the enquiry - petition disposed off.

Summary

Issues:
Challenge to Ext.P9 for not conforming to a previous judgment in W.P(C) No. 9708 of 2017.

Analysis:
The petitioner contested Ext.P9, arguing that it did not conclusively address the coverage of the petitioner's activities under service tax obligations as directed in a previous judgment. The petitioner objected to the subsequent notices (Exts.P13 and P14) requesting records and statements to determine tax liability. The Court noted that Ext.P9 did not definitively settle the service tax liability issue but proposed further investigation. The respondents clarified that the purpose was to collect evidence for adjudication by the appropriate authority. The Court emphasized that Ext.P9 did not provide a final decision on the service tax liability, leading to the need for further inquiry.

The respondents indicated that Ext.P9 had not definitively determined the service tax liability but initiated a preliminary analysis of the petitioner's contentions. The Court highlighted that the primary aim was to confirm or rule out the applicability of service tax on the University. The respondents were directed to continue the inquiry process without a final decision on tax liability. The Court emphasized that the investigation was necessary before adjudication and that the respondents were mandated to issue a show cause notice for adjudication by the appropriate authority.

The Court reiterated that the respondents had not conclusively decided on the chargeability of service tax. Both parties agreed that the petitioner should participate in the inquiry process as directed by Ext.P13 and P14 or as directed by the Deputy Director. The petitioner University was instructed to appear before the Deputy Director, Directorate General of GST Intelligence, to provide records and statements for the inquiry. The Deputy Director was directed to conduct an independent inquiry, considering the statements made in the writ petition, and complete the process within four weeks.

In conclusion, the Court disposed of the writ petition, directing the petitioner to cooperate in the inquiry process. The judgment emphasized the need for further investigation before a final decision on the service tax liability of the petitioner University. The respondents were instructed to continue the inquiry process in accordance with the legal procedures and to issue a show cause notice for adjudication by the appropriate authority.