2024 (6) TMI 713 - HC - Service Tax

Levy of Service Tax under the provisions of the Finance Act, 1994 as in force and still 13.06.2017 for the finance years 2016-17 and 2017-18 up to 30.06.2017 - failure to respond to the SCN - HELD THAT - On consideration of the N/N. 8/2008-ST, dated 01.03.2008 as amending N/N. 6/2005 dated 01.03.2005 and also considering the fact that the petitioner is a small entity engaged in cable network connection, this Court is of the view that the petitioner may have the case on merits and therefore, a liberty can be given to the petitioner to file statutory appeal. This Writ Petition is disposed of by permitting the petitioner to file statutory appeal before the Appellate Commissioner within 30 days from the date of receipt of a copy of this order together with the deposit of 25% of the disputed amount, as a condition for entertaining the appeal.

Summary

Issues:
Levy of Service Tax under the Finance Act, 1994 for the financial years 2016-17 and 2017-18.

Analysis:
The petitioner, a cable service provider, was issued a show cause notice for not filing Service Tax returns for the period 2016-17 and 2017-18. The notice mentioned discrepancies between the income declared in Income Tax returns and the turnover declared in Service Tax returns. The petitioner failed to respond to the notice, leading to the dispute regarding the non-payment of service tax amounting to Rs. 23,10,156 for the mentioned financial years.

The petitioner argued that they were exempt from obtaining Service Tax registration under notification No.8/08-ST due to their turnover being below the threshold during the disputed period. The petitioner claimed that despite providing services, their turnover did not necessitate registration, and therefore, the impugned order should be quashed.

The petitioner expressed willingness to deposit 25% of the disputed tax for appealing before the Appellate Commissioner, although only 7.5% was required as per Section 35(f) of the Central Excise Act, 1944. On the other hand, the Senior Standing Counsel for the respondent contended that the petition should be dismissed due to delays and cited precedents to argue that the issue was no longer maintainable.

Considering the submissions, the court acknowledged the petitioner's status as a small entity engaged in cable network connection and found merit in the petitioner's case. The court permitted the petitioner to file a statutory appeal before the Appellate Commissioner within 30 days from the date of the order, with a condition to deposit 25% of the disputed amount. The court emphasized that the petitioner should be heard before the appeal is decided and directed the Appellate Commissioner to issue final orders within 6 months from receiving a copy of the court's order.

Ultimately, the court disposed of the Writ Petition with the mentioned directions, without imposing any costs, and closed the connected miscellaneous petitions.