2015 (9) TMI 837 - HC - Service Tax

Quashing of Show cause notice - Jurisdictional error - Held that - Petitioner will have to demonstrate that it is not rendering any services within the meaning of Finance Act 1994, much less the business support services . It is the allegation in the show cause notice that the shipping lines / airlines are approached by the Petitioner - Assessee after getting inquiry from the clients and that is how the space or the slot is booked. That there is no such client who had approached the petitioner but the space is booked irrespective of any such inquiry from the client is a version of the Petitioner which the petitioner will have to establish and prove. That there is no customer of the Petitioner and therefore the Petitioner is not an agent of such customer and hence whatever amounts are collected are not in the nature of service charge, are all matters which raise essentially disputed questions of fact. - No merit in petition - Decided against assessee.

Summary

Issues:
Challenge to show cause notice based on jurisdictional facts.

Analysis:
The petitioner sought to quash a show cause notice issued without proper satisfaction of jurisdictional facts. The petitioner argued that an authority cannot confer jurisdiction by deciding such facts erroneously. Reference was made to the judgment in Raza Textiles Ltd. v/s Income Tax Officer, emphasizing the importance of correct jurisdictional facts.

The show cause notice raised concerns regarding the petitioner's services falling under 'Business Auxillary Services' as defined under the Finance Act, 1994. The petitioner contended a shift in the authority's stand, claiming they were not acting as service providers but merely booking space in shipping lines/airlines. The petitioner sought an opportunity to establish jurisdictional facts before challenging the notice.

The court disagreed with the petitioner, citing the Raza Textiles Ltd. case where the Supreme Court held that incorrect jurisdictional facts do not necessarily invalidate the notice. It emphasized that disputed factual questions should be addressed before the Adjudicating Authority. The court noted that the petitioner would have the chance to dispute the allegations and prove their position during adjudication.

Ultimately, the court dismissed the petition, stating that the petitioner should present all contentions, including those based on the Commissioner of Service Tax's view, before the Adjudicating Authority for proper consideration and decision in accordance with the law. The judgment highlighted the importance of allowing the adjudication process to proceed without unnecessary delays or hindrances.