2020 (2) TMI 132 - HC - Service Tax

Non-payment/short payment of service tax - mismatch in the value of services - demand of documents for audit - HELD THAT - The writ applicant should file a detailed reply to the impugned Reminder dated 2nd December, 2019. The grounds which are urged before this Court, shall be put forward before the concerned Authority. This Writ Application is disposed off with a direction to the respondent No.3 to furnish a copy of the letter of the even no. dated 27th June, 2019 at the earliest. Once the writ applicant is in receipt of such office letter dated 27th June, 2019, as referred to in the Reminder-I, the writ applicant shall look into the same and file an appropriate reply making good his case that the demand is not justified in law. Let this exercise be undertaken at the earliest. Application disposed off.

Summary

Issues:
1. Quashing of Reminder-I letter and another letter issued by Superintendent CGST
2. Stay on operation and execution of Reminder-I letter
3. Compliance with service tax regulations and audit orders
4. Legality of the letter demanding documents for audit
5. Reference to another pending case

Analysis:
1. The petitioner, a Private Limited Company, sought relief through a Writ Application to quash Reminder-I letter and another letter dated 27.06.2019 issued by the Superintendent CGST. The petitioner also requested a stay on the operation of the Reminder-I letter pending the petition's disposal.

2. The petitioner company had been providing taxable services and had a history of compliance with service tax regulations. They were registered under the Finance Act, 1994, and later under the Goods and Service Tax Act, 2017. Following an audit, discrepancies were resolved by paying the differential amount of service tax, interest, and penalties.

3. The Department later pointed out further discrepancies in service tax payments, to which the petitioner responded, citing the repeal of service tax provisions. The Department then issued the Reminder-I letter on 02.12.2019, requesting details on short payment of service tax.

4. The Reminder-I letter referenced an office letter dated 27.06.2019, which the petitioner claimed they never received. The petitioner argued that demanding documents for audit at this stage, after the repeal of service tax provisions, was illegal. The issue was related to the legality of demanding documents under Rule 5(A) of the Services Tax Rules.

5. The Court directed the respondent to provide a copy of the letter dated 27th June, 2019 to the petitioner. The petitioner was instructed to file a detailed reply to the Reminder-I letter, addressing the grounds raised in court before the concerned Authority. The Court disposed of the Writ Application, allowing the petitioner to return if faced with any difficulties, with direct service permitted for future communications.