2024 (1) TMI 724 - AT - Service Tax

Validity of SCN - the assesse is Drushti Computer Centre under Drushti Charitable Trust whereas the show cause notice, Order-In- Original and the Order- In Appeal was issued against Arunkant Jadav showing him as a proprietor of Drushti Computer Centre and Director of M/s. Drushti Charitable Trust - HELD THAT - It is held that despite raising this specific issue before the Adjudicating Authority as well as Commissioner (Appeals) no finding was given, Since there is no dispute that the demand was raised, confirmed and upheld against Shri Arunkant Jadav whereas the assesse from which the demand is recoverable is not Arunkant jadav but it is M/s. Drushti Computer Centre under Drushti Charitable Trust, therefore, on this ground alone that the show cause notice was issued to the wrong person the entire proceeding is ab- initio illegal and incorrect. The impugned order is set aside and appeal is allowed.

Summary

Issues involved:
The issues involved in this case are the demand of service tax confirmed against an individual in respect of commercial training and coaching under a franchise agreement, and the incorrect issuance of the show cause notice against the wrong person.

Issue 1: Demand of service tax against individual

The appeal was directed against the Order-In-Appeal confirming the demand of service tax against the individual in relation to commercial training and coaching services. The appellant's counsel conceded that the issue was decided against them in a previous Tribunal's Final Order, but argued that the demand for the extended period should be set aside based on a similar case. The appellant contended that the demand against the individual was illegal as the entity in question was a charitable trust, not the individual. The Revenue reiterated the findings of the impugned order. The Tribunal observed that the show cause notice and subsequent orders were issued against the individual, whereas the demand should have been made against the charitable trust. Therefore, the demand against the individual was deemed illegal, and the appeal was allowed.

Issue 2: Incorrect issuance of show cause notice

Despite the appellant raising the issue that the show cause notice was issued against the wrong person, no finding was given by the Adjudicating Authority or the Commissioner (Appeals). The appellant argued that the computer study center was managed by a charitable trust working on a no-profit, no-loss basis, and therefore, no service tax should be levied. It was highlighted that the demand was raised against the individual, whereas it should have been against the entity. The Tribunal held that the entire proceeding was incorrect and illegal due to the show cause notice being issued to the wrong person. As a result, the impugned order was set aside, and the appeal was allowed.