2015 (5) TMI 564 - HC - Service Tax

Demand of service tax - Liability of co-operative societies to pay service tax - Held that - Petitioner is relegated to pursue the matter before the third respondent/Superintendent of Central Excise in response to Exts.P1 and P3 proceedings. The third respondent/Superintendent of Central Excise/competent authority shall consider the reply submitted by the petitioner and shall also hear the petitioner on the question of their liability to pay service tax; and if the liability is upheld, direction be given to the petitioner to produce further documents for quantification of the liability - Appeal disposed of.

Summary

Issues:
1. Jurisdiction and legality of service tax proceedings against a cooperative society.
2. Interpretation of provisions under the Finance Act regarding service tax liability.
3. Compliance with court directives in previous judgments regarding service tax liability assessment.
4. Requirement of further documents for quantification of service tax liability.

Analysis:
The petitioner, a cooperative society, challenged the legality and jurisdiction of service tax proceedings initiated against them, contending that their activities do not fall under the purview of Section 65(12)(v) of the Finance Act. The petitioner had already responded to show cause notices and submitted relevant documents. Referring to previous judgments, the petitioner argued for a fair assessment of their liability to pay service tax based on facts and law.

The respondents, represented by the Standing Counsel, asserted that after considering previous judgments, it was determined that the society's activities did indeed attract service tax liability. An assessment was conducted, quantifying the liability and issuing appropriate orders. The petitioner's counsel emphasized the need to evaluate the society's activities based on their by-laws and records to determine tax liability accurately.

The court directed the petitioner to continue the matter with the Superintendent of Central Excise, responding to the ongoing proceedings and submitting additional documents if necessary for quantifying the service tax liability. The competent authority was instructed to consider the petitioner's submissions, hear their arguments on tax liability, and finalize the proceedings within two months from the date of the judgment. The petitioner was required to provide a copy of the judgment and the writ petition to the competent authority for further action, with all contentions left open for future consideration.

In conclusion, the court disposed of the writ petition, outlining a clear path for the petitioner to address the service tax proceedings, ensuring a fair assessment of their liability within a specified timeframe and maintaining transparency in the process.