2023 (10) TMI 435 - HC - Service Tax

Applicability of Reverse charge mechanism - liability petitioner to pay service tax - petitioner was providing services of goods transport agency - N/N. 30/2012-Service Tax (S.T.) dated 20.06.2012 with effect from 01.07.2012 read with Rule 2(1)(d)(5) of the Service Tax Rules, 1994 - HELD THAT - The petitioner may have a case to establish before the respondent that the petitioner was not liable to pay tax, and that, the recipient of service alone was liable to pay tax on reverse charge basis as is specified in Notification No.30/2012-Service Tax (S.T.) dated 20.06.2012 - The petitioner has not received any of the notices, which preceded the impugned order and thus, the petitioner had failed to participate in the proceedings. Although the respondent cannot be faulted, the fact remains that the petitioner did not get an adequate opportunity to participate in the show cause proceedings. The impugned order is set aside and the case is remitted back to the respondent to pass a fresh order on merits and in accordance with law within a period of six months from the date of receipt of a copy of this order - Petition disposed off.

Summary

Issues involved:
The petitioner challenges an Order-in-Original and Demand Notice issued by the respondent regarding service tax liability for the period between 2016 and 2017.

Summary:
The impugned order sought to demand a sum of Rs.19,73,486/- from the petitioner based on income tax returns, alleging service tax liability. The petitioner contended that as a goods transport agency, they were not liable to pay tax, as per relevant notifications. The petitioner claimed they were not aware of the tax liability and had not registered with the service tax department. The respondent argued that even if the petitioner was not liable, registration and filing nil returns were mandatory. Notices were sent to the petitioner's address, but the petitioner claimed not to have received them. The Court found that the petitioner had not participated in the proceedings due to not receiving notices, leading to a lack of opportunity. The impugned order was set aside, and the case was remitted back to the respondent for a fresh order within six months, ensuring the petitioner's right to be heard. The quashed order was treated as a corrigendum to the Show Cause Notice, requiring the petitioner to reply within thirty days. The Writ Petition was disposed of with no costs.