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2021 (3) TMI 378 - HC - Service TaxValidity of SCN - impugned show cause notice was issued on the basis of information retrieved from the Income Tax Department - taxable service provided or not - HELD THAT - The impugned show cause-cum-demand notice issued to the petitioner by respondent No.3, clarifying that respondents would be at liberty to pursue with the verification as to income of the petitioner received from other sources and may issue fresh show cause notice in accordance with law if the circumstances so warrant. Petition disposed off.
Issues:
Challenge to show cause-cum-demand notice based on jurisdiction and service tax liability. Analysis: The petitioner, a Chartered Accountant and partner in a firm, challenged a show cause-cum-demand notice issued by respondent No.3, alleging service tax liability on the remuneration received by the petitioner from the firm. The petitioner contended that the notice was issued without jurisdiction, citing a decision by the Central Excise and Service Tax Appellate Tribunal that service tax cannot be recovered based on income tax returns. The respondents, based on information from the Income Tax Department, initially issued the notice but later concluded that the petitioner's activities were not liable to service tax under the Finance Act, 1994. The respondents sought clarifications regarding income from other sources. The petitioner requested the withdrawal or quashing of the notice, and if necessary, issuance of a fresh notice specifically addressing income from other sources. The respondents sought the withdrawal of the stay order to proceed with the matter. The High Court, after considering the arguments, set aside and quashed the impugned show cause-cum-demand notice dated 30.12.2020. The court clarified that the respondents were free to continue verifying the petitioner's income from other sources and could issue a fresh show cause notice if required by the circumstances. The petitioner's request for withdrawal or quashing of the notice was granted, with the possibility of a fresh notice specifically addressing income from other sources. The writ petition was disposed of accordingly.
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