9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 1128 - HC - Service TaxLevy of Service Tax - Chitty business - effect of amendment in the definition of the word service from 15.06.2015 onwards, retrospective or prospective? - HELD THAT - The question whether companies like the petitioners who are engaged in Chitty business are exigible to service tax was considered by the Hon ble Supreme Court in UNION OF INDIA AND ORS. VERSUS M/S. MARGADARSHI CHIT FUNDS (P) LTD. ETC 2017 (7) TMI 224 - SUPREME COURT . It was laid down in the said decision that after the amendment brought about to the definition of the word service from 15.06.2015 onwards, service tax is payable on Chit Fund. Relying on the aforesaid decision, a Division Bench of this Court, in its judgment in ALL KERALA ASSOCIATION OF CHIT FUNDS VERSUS UNION OF INDIA AND OTHERS 2018 (4) TMI 73 - KERLA HIGH COURT held that the amendment brought about to the definition of service cannot be said to be clarificatory and there can be no retrospective operation given to such amendment. As a corollary it has to be understood that service tax cannot be levied on Chit Funds prior to the amendment, i.e. 15.06.2015. In the light of the undisputed fact that the demand under Ext.P1 to Ext.P22 takes in demands for the period 2012-13 and 2013-14 and is hence unsustainable in law. In the circumstances, it is only appropriate to remand the matter to the adjudicating authority for fresh adjudication in the light of the law as laid down by the Hon ble Supreme Court and followed by the Division Bench of this Hon ble Court. For the purpose of such adjudication, necessarily an opportunity of hearing should be offered to the petitioner. Petition allowed by way of remand.
Issues:
Demand for service tax for the period 2012-13 and 2013-14 on companies engaged in Chitty business. Analysis: The judgment in question revolves around the demand for service tax on companies involved in Chitty business for the years 2012-13 and 2013-14. The Hon'ble Supreme Court had previously ruled that service tax is applicable to Chit Funds post an amendment to the definition of 'service' from 15.06.2015 onwards. However, a Division Bench of the Kerala High Court, in a separate judgment, held that this amendment cannot have retrospective effect. Therefore, it was concluded that service tax cannot be imposed on Chit Funds before the said amendment date. Given the above legal backdrop, the court found the demand for service tax for the period 2012-13 and 2013-14, as reflected in documents Ext.P1 to Ext.P22, to be unsustainable in law. Consequently, the matter was remanded to the adjudicating authority for fresh consideration in line with the legal principles established by the Hon'ble Supreme Court and the Division Bench of the High Court. The court emphasized the necessity of providing the petitioners with a fair hearing during this fresh adjudication process. As a result of the judgment, documents Ext.P1 to Ext.P22 were set aside, and the authorities were directed to reexamine the matter in accordance with the decision in the Margadarshi Chit Fund case. Furthermore, the court clarified that any refund applications submitted by the petitioners should be promptly evaluated based on the legal principles outlined in the aforementioned case. Ultimately, the writ petition was allowed in favor of the petitioners, granting them the relief sought in the matter.
|
