2020 (2) TMI 47 - HC - Service Tax

Recovery of service tax - service sim cards sold by the Petitioner for BSNL - It is the plea of the Petitioners that the BSNL being the ultimate service provider has collected the service tax from the customers and paid service tax and therefore there cannot be any demand of tax for the Petitioner - HELD THAT - The Petitioners should approach the First and Third Respondents for Adjudication of Show Cause Notice under the Finance Act - the First and Third Respondents are directed to pass appropriate order within a period of three months from the date of receipt of a copy of this order. While passing the order, the Respondents shall keep in mind the above cited orders. It is needless to state that before passing such order, the Petitioners shall be give an opportunity to file reply and also being heard. Petition disposed off.

Summary

Issues:
Challenging Show Cause Notices under Finance Act, 1994 for service tax on sim cards sold by Petitioner for BSNL.

Analysis:
In the present case, the Petitioners have filed writ petitions seeking a Writ of Prohibition against the First Respondent to stop further proceedings based on a communication dated 16.03.2010 and a Writ of Certiorari to quash the records of the Second Respondent dated 16.04.2010. The issue revolves around challenging the Show Cause Notices issued by the First and Third Respondents under the Finance Act, 1994, aiming to recover service tax on service sim cards sold by the Petitioner for BSNL (Bharat Sanchar Nigam Limited).

The Petitioners argue that since BSNL, as the ultimate service provider, has already collected and paid the service tax on the transactions, there should be no additional demand for tax on the Petitioner. The counsel for the Petitioners relies on various decisions of the Tribunal, appellate commissioners, and original authorities to support their plea, as listed in the petition.

The learned counsel for the Respondents counters by stating that there are no contradictory decisions from the Tribunal or High Court at present. However, considering the decisions favoring the Petitioners, the court opines that the Petitioners should approach the First and Third Respondents for adjudication of the Show Cause Notice under the Finance Act by citing the supportive decisions mentioned in the petition.

Consequently, the court directs the First and Third Respondents to pass an appropriate order within three months from the date of receipt of the court's order, considering the cited decisions. The Respondents are instructed to allow the Petitioners to file a reply and present their case before passing the final order. The Writ Petitions are disposed of with no costs, and connected miscellaneous petitions are closed as of 07.01.2020.