2016 (2) TMI 595 - HC - Service Tax

Extended period of limitation - assessee stopped payment of service tax in the pretext of seeking clarification from the Commissioner - Held that - The order of the Commissioner is well reasoned and discussed. It has analyzed the facts threadbare arriving at the conclusion that the mere seeking of a clarification from the Board cannot be sufficient justification to withhold payment of service tax. This aspect of the matter has not been considered by the Tribunal. The Commissioner further arrived at the finding that after the clarification by the Board the Respondent has in fact paid the service tax but partially only. The Commissioner further arrived at the finding that the plea for seeking clarification from the Board could not be a valid justification for the Respondent to take advantage of their own wrong by now invoking the plea of limitation. The Commissioner has further arrived at a finding of fact from the documents produced by the transporters and also submitted by the Respondent that the transport challans fulfilled all the requirements of the consignment note and that there may have been some additional information in it for the sake of convenience would not take the basic character of a consignment note fulfilled. The Tribunal without any discussion of these findings arrived at by the Commissioner by a cryptic conclusion has held that in absence of any consignment note actually having been issued no liability of service tax arises. The question in the facts of the case is that once liability has been admitted by the Respondent can technicalities justify non-compliance with the law when there is no substantive defence. - Case remanded back to tribunal for a fresh decision - Decided against the revenue.

Summary

Issues:
1. Sustainability of the Customs, Excise and Service Tax Appellate Tribunal's order.
2. Liability for payment of service tax regarding Goods Transport Agreement.
3. Justification for withholding payment of service tax.
4. Interpretation of the requirement of a consignment note for service tax liability.
5. Consideration of findings by the Commissioner in the Tribunal's order.
6. Requirement of reasoned and considered appellate orders for judicial review.

Analysis:

1. The High Court found the order of the Customs, Excise and Service Tax Appellate Tribunal to be unsustainable and remanded the matter for a fresh decision in accordance with the law. The Tribunal's decision was deemed lacking in proper reasoning and consideration of essential aspects of the case.

2. The case involved a show cause notice issued to the Respondent regarding the payment of service tax for a Goods Transport Agreement. The Commissioner held the Respondent liable for service tax payment, citing non-compliance with tax procedures and evasion of tax, despite the Respondent's claim of seeking clarification from the Central Board of Excise and Customs.

3. The Court analyzed the Commissioner's detailed order, emphasizing that seeking clarification from the Board did not justify the Respondent's non-payment of service tax. The Tribunal's failure to consider crucial findings and technicalities regarding the consignment note requirement raised questions about substantive compliance with the law.

4. The dispute centered on the necessity of a consignment note for service tax liability. The Commissioner concluded that the transport challans fulfilled the consignment note requirements, while the Tribunal focused on the absence of a consignment note as the basis for non-taxability of the service.

5. The High Court highlighted the importance of reasoned appellate orders for judicial review. It criticized the Tribunal for its lack of discussion on the Commissioner's findings and failure to provide adequate justification for setting aside the original authority's decision.

6. Ultimately, the Court set aside the Tribunal's order and directed a fresh decision, emphasizing the need for both parties to appear before the Tribunal for further proceedings. The Tax Appeal was allowed, indicating a favorable outcome for the Appellant in the case.