2022 (3) TMI 264 - HC - GST

Evasion of service tax - willful suppression of material facts - seeking production of all the relevant materials before the Court - HELD THAT - It would be inappropriate for the Court under Article 226 to go into such question requiring the petitioner to produce all the relevant materials before the Court and then embark upon the question as to whether the tax was paid or not. The said exercise would be further inappropriate from the point of view of the submission of Mr. S C Keyal, learned counsel for the GST department that the petitioner had not produced all the relevant materials before the authorities and nor had cooperated with the authorities. The Joint Commissioner of Central Goods and Service Tax, Dibrugarh is directed to give a fresh hearing to the petitioner and allow them to produce all the relevant materials as may be desired to substantiate that the tax involved in the demand-cum-show-cause notice was duly paid by them. Accordingly, the petitioner to appear before the Joint Commissioner, Central Goods and Service Tax, Dibrugarh on 28.03.2022 at 10 30 AM. Upon the appearance of the petitioner, the Joint Commissioner shall give a fresh hearing to the petitioner and allow them to produce all the relevant materials and also to raise any other issue that the petitioner may desire to raise. Upon conducting such hearing, a reasoned order be passed and the order to be passed shall supersede the demand- cum-show-cause notice dated 29.09.2020 impugned before this court. Petition allowed.

Issues:
1. Alleged willful suppression of material facts to evade payment of service tax.
2. Petitioner's contention of having paid all necessary service tax.
3. Department's issuance of demand-cum-show-cause notice.
4. Lack of cooperation from the petitioner during the proceedings.
5. Direction for a fresh hearing and submission of relevant materials.

Analysis:

1. The petitioner, a registered contractor providing manpower supply service and a service provider to Oil India Limited, challenged a demand-cum-show-cause notice alleging willful suppression of material facts to evade service tax payment. The notice claimed a tax amount of ?1,46,41,544 under the Finance Act, 1994.

2. The petitioner's counsel contended that all necessary service tax had been paid as per the law, highlighting exemptions due to changes in regulations. The petitioner argued that they were not liable to pay service tax for a specific period under the new law.

3. The GST department, represented by its counsel, issued the notice due to the petitioner's absence and lack of cooperation during the proceedings. However, the department expressed willingness to grant a fresh hearing and allow the petitioner to present relevant evidence supporting their tax payments.

4. The court acknowledged the petitioner's claim of having paid all taxes but refrained from delving into the matter under Article 226. The court deemed it inappropriate to assess tax payments without the petitioner submitting all relevant materials, as claimed by the department.

5. In the final judgment, the court directed the Joint Commissioner of Central Goods and Service Tax to conduct a fresh hearing for the petitioner. The petitioner was instructed to appear with all relevant materials on a specified date. The Joint Commissioner was tasked with evaluating the evidence, allowing the petitioner to raise any issues, and issuing a reasoned order superseding the earlier demand-cum-show-cause notice.

6. Pending the fresh hearing and the issuance of a reasoned order, the court prohibited any coercive actions against the petitioner. The writ petition was allowed in favor of the petitioner, subject to the outlined directives for the upcoming proceedings.

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