2012 (10) TMI 336 - HC - Service Tax

Import of services - Intellectual Property Services - assessee contested as no demand can be raised in respect of services rendered by non-residents prior to 18.4.2006 - Held that - The services by different notice relating to service tax on services classifiable under Section 65(55a) of the Finance Act, 1999, were made taxable w.e.f. 10.9.2004 by Finance Act, 2004 & the present show cause notice dated 21.10.2011 relates to the period 18.4.2006 onwards on the services as classified and defined under Section 65(55b) of the Finance Act, 1994.- against assessee.

Summary

Issues:
Challenge to show cause notice dated 21.10.2011 on grounds of illegality, lack of jurisdiction, unauthorized issuance, lack of application of mind, and being time-barred. Denial of receipt of services rendered by non-residents prior to 18.4.2006 and contention of not being deemed a service provider under Section 166(A) of the Finance Act, 1994. Jurisdictional objections due to services not being taxable before 18.4.2006 and previous notice being dropped. Preliminary objection regarding the availability of a writ petition under Article 226 against the show cause notice. Lack of cooperation in inquiry before the show cause notice issuance.

Analysis:

The petitioner challenged the show cause notice dated 21.10.2011 on various grounds, including illegality, lack of jurisdiction, unauthorized issuance, absence of application of mind, and being time-barred. The petitioner specifically denied receiving services from non-residents before 18.4.2006 and argued against being deemed a service provider under Section 166(A) of the Finance Act, 1994. The petitioner contended that the notice lacked jurisdiction as the services in question were not taxable before 18.4.2006 and highlighted that a previous notice concerning the same services had been dropped. Reference was made to the case of Raza Textiles Vs. Income Tax Officer, Rampur, AIR 1973 SC 1362.

A preliminary objection was raised regarding the availability of a writ petition under Article 226 against the show cause notice. It was argued that the services in question were beyond the taxable period before 18.4.2006 and were classified under Section 65(55b) of the Finance Act, 1994. The respondent emphasized that services falling under Section 65(55a) were made taxable from 10.9.2004 by the Finance Act, 2004. The show cause notice dated 21.10.2011 pertained to services defined under Section 65(55b) of the Finance Act, 1994.

Additionally, an objection was raised against the petitioner for not cooperating in the inquiry before the issuance of the show cause notice and for approaching the High Court without awaiting the decision on the replies submitted on 22.11.2011 and 2.6.2012. The court examined the order in the original dated 29.4.2011, which was issued following a previous show cause notice. The court found that the principles of law from the judgment in Raza Textiles Vs. Income Tax Officer, Rampur were not applicable in the present case, concluding that there was no jurisdictional error warranting interference in the matter. Consequently, the writ petition was dismissed.