2022 (10) TMI 1010 - HC - Service Tax

Constitutional Validity of Section 66D(a)(iv) of the Finance Act, 1994 and entry No.6 of Notification 30/2012-ST dated 20.06.2012, as amended with effect from 01.04.2016 - activity of parting with the exclusive privilege/right or transferring/ granting the exclusive right or privilege of the State - grant of liquor licence - HELD THAT - On perusal of the Amendment to the Finance (No.2) Act, 2019 clearly indicates that retrospective exemption has been granted in favour of the assessees, including the petitioner, from payment of service tax on service by way of grant of liquor licence. Under these circumstances, in view of the amendment vide Finance (No.2) Act, 2019, vide Act No.23 of 2019 which came into force with effect from 01.08.2019, it is opined that the said amendment would enure to the benefit of the petitioner-assessee. In view of the specific assertion on the part of the petitioner that the liability along with interest has been discharged already by the petitioner, it is deemed just and proper to direct the respondents to consider the claim of the petitioner of discharge of liability of the show-cause notice by providing an opportunity in this regard to the petitioner and considering the pleadings and documents submitted by him, and proceed to pass appropriate orders in accordance with law. Petition disposed off.

Summary

Issues Involved:
Challenge to the constitutionality of certain provisions of the Finance Act, 1994 and related notifications; Quashing of an impugned show-cause notice; Legality of specific notifications under the CGST Act, 2017 and Service Tax Rules, 1994.

Analysis:
The petitioner sought various reliefs through a writ petition, challenging the constitutionality of Section 66D(a)(iv) of the Finance Act, 1994 and certain notifications. The petitioner also sought to quash an impugned show-cause notice, arguing it was unreasonable, arbitrary, and without legal authority. The High Court examined the contentions and materials presented by both parties.

The petitioner contended that certain items in the show-cause notice were covered under a retrospective exemption granted by an amendment to the Finance Act, 1994. The petitioner highlighted that liabilities for some items had been discharged. The respondents opposed the petition, arguing against its merit. The Court noted the contentions and examined the specifics of the items listed in the show-cause notice.

The Court observed that the retrospective exemption under the Finance Act, 1994 applied to certain items, benefiting the petitioner. Consequently, the Court set aside Item Nos. 1 to 5 of the show-cause notice. Regarding Item Nos. 6 to 14, where the petitioner had already discharged liabilities, the Court directed the respondents to consider this fact, provide an opportunity to the petitioner, and make decisions in accordance with the law.

In the final order, the Court disposed of the writ petition, setting aside the impugned show-cause notice concerning Item Nos. 1 to 5. For Item Nos. 6 to 14, the respondents were directed to evaluate the petitioner's claim of liability discharge promptly and in compliance with the law. The petitioner was granted the liberty to submit additional representations for further consideration by the respondents.