2013 (2) TMI 157 - HC - Service Tax

Application for registration not decided within the stipulated time Assessee claims to have been carrying on business of business auxiliary - applied for registration but application was not decided within the stipulated time Therefore, they claimed that in view of non-disposal of the application by fiction of law, they are deemed to have been registered under the heading business auxiliary Department issued a registration under the category of clearing and forwarding agent for which never applied for Held that - The provision of law is clear that in the event there is no rejection within certain point of time, the registration is deemed to have been granted. In this case application was kept pending for some time and after expiry of the stipulated time the order was passed and unilaterally the registration was granted under the category of clearing and forwarding agent for which no application was made - Application was made for registration under the category of business auxiliary, and no application was made for clearing and forwarding agent. Therefore, either the application ought to have been allowed or ought to have been rejected on its own merit without making any third party s case. Order set aside. Department was directed to treat the respondent-company s registration as the provisional registration in the category of business auxiliary and, accordingly, all the statutory obligations shall be discharged by the company In favour of assessee

Issues involved:
1. Interpretation of provisions of the Service Tax Act regarding deemed registration under specific categories.
2. Validity of the order passed by the Commissioner of Service Tax.
3. Discrepancy between the business activities claimed by the respondent-company and the registration granted by the department.
4. Jurisdiction of the Tribunal to decide on the nature of business activities carried out by the respondent-company.
5. Applicability of provisional registration and statutory obligations during the pendency of the Tribunal's decision.

Analysis:

1. The primary issue before the High Court was the interpretation of provisions of the Service Tax Act regarding deemed registration under specific categories. The respondent-company claimed deemed registration under the category of "business auxiliary" due to the non-disposal of their application within the stipulated time. However, the department unilaterally granted registration under the category of "clearing and forwarding agent," which was challenged by the respondent in a writ petition.

2. The High Court analyzed the validity of the order passed by the Commissioner of Service Tax, which granted registration under the category of "clearing and forwarding agent" to the respondent-company. The court noted discrepancies between the business activities claimed by the respondent and the registration granted by the department, emphasizing the need for proper consideration of the application on its own merit without prejudging the nature of business.

3. The court addressed the jurisdiction of the Tribunal to decide on the nature of business activities carried out by the respondent-company. It was observed that the Tribunal was well-equipped to determine whether the respondent was carrying on business as a clearing and forwarding agent or as a business auxiliary. The court emphasized that the Tribunal should independently assess the matter without being influenced by previous findings or decisions.

4. Regarding the applicability of provisional registration and statutory obligations during the pendency of the Tribunal's decision, the High Court directed the department to treat the respondent-company's registration as provisional in the category of business auxiliary. The court instructed the Tribunal to hear the matter within three months and decide independently. The court clarified that the provisional registration would be effective until the Tribunal's decision, after which the department would take action in accordance with law.

5. The High Court's judgment emphasized the importance of allowing the Tribunal to decide on the nature of the respondent's business activities without being bound by previous orders or observations. The court directed the Tribunal to make its decision independently and clarified that the provisional registration granted by the court would not influence the Tribunal's decision-making process.

Overall, the High Court's judgment focused on ensuring a fair and independent assessment of the respondent-company's business activities, highlighting the need for proper consideration of the application for registration and the importance of upholding statutory obligations during the legal proceedings.

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