2021 (3) TMI 841 - HC - Service Tax

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - scope of services - HELD THAT - It is not in dispute that the petitioner has not responded to the show cause notices and hence, there has been some lapse on their side. Taking note of the submission made by the learned counsel for the petitioner and also that initially they had intended to avail the benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and however, due to circumstances including Pandemic, they were not able to fulfill the requirements under the said scheme, the impugned order deserves to be looked into in an appropriate manner insofar as the order has been passed without participation of the petitioner. Even if the petitioner were to prefer an appeal, the authority which has passed the order will have no benefit of the contentions on its merits as sought to be made out in the present writ petition. It would be an appropriate case to afford an opportunity for the petitioner to put forth his case on merits so that a reasoned order is passed by the Assessing Authority. Taking note of the nature of contentions taken including in specific, as regards to the business transaction in Annexure-B not being 'service', which is a jurisdictional objection, the matter requires consideration - Petitioner is directed to appear before the respondent on 08.03.2021. Petitioner to co-operate for early disposal of the proceedings and shall not seek for unnecessary adjournments. Looking into the nature of discretion exercised in favour of the petitioner, it would be appropriate that the authority dispose off the proceedings after appearance of the petitioner within a period not later than 30 days - Petition allowed by way of remand.

Summary

Issues:
Challenge to order, jurisdictional objection, non-response to notices, benefit under Sabka Vishwas Scheme, violation of natural justice, remand for consideration of merits, personal hearing, timeline for disposal, property encumbrance, bank account attachment.

Challenge to Order:
The petitioner challenged the order and sought a writ to set aside the impugned order, arguing that the transaction in question cannot be considered a service under relevant sections of the Service Tax Act. The petitioner admitted the order was passed due to their non-response to notices issued by the authority.

Jurisdictional Objection:
The petitioner contended that the business transaction reflected in the agreement should not be considered a service and was not taxable. The court noted that the merits of this contention should be considered by the authority, but the petitioner's non-response to show cause notices was a lapse on their part.

Benefit under Sabka Vishwas Scheme:
The petitioner initially sought to avail the benefit under the Sabka Vishwas Scheme but later realized the legality of treating the transaction as a service. The court acknowledged the petitioner's attempt to resolve the dispute through the scheme but emphasized the need for participation in the proceedings.

Violation of Natural Justice:
The revenue relied on a judgment regarding violation of natural justice in a similar case but the court found the present case to have a different factual matrix. The court highlighted the importance of the petitioner participating in the proceedings to present their case effectively.

Remand for Consideration of Merits:
Considering the jurisdictional objection raised by the petitioner, the court set aside the impugned order and remanded the matter for the petitioner to reply to show cause notices and have a personal hearing to present their contentions on the merits of the case.

Property Encumbrance and Bank Account Attachment:
The petitioner undertook not to sell or encumber the property during the proceedings. The court directed the lifting of the bank account attachment while emphasizing the need for cooperation and timely disposal of the proceedings.

Conclusion:
The writ petition was disposed of with directions for the petitioner to appear before the respondent for further proceedings. The court granted a timeline for the disposal of the case and emphasized the importance of the petitioner's active participation in presenting their case effectively.