2024 (11) TMI 1045 - AT - Service Tax

Demand sustainability on the ground of limitation - Service tax demand under the category of Goods Transport Agency (GTA) services - mainly based on income tax data, form 26AS and balance sheets of the appellant s business of transportation of goods - HELD THAT - As demand of service tax is raised and confirmed solely based on data received from income tax department viz. from 26AS and admittedly there was no independent examination carried out even considering such recorded income whether related to consideration received towards taxable services provided and leviability of service tax thereon. As seen from the records that appellant has filed ST-3 returns for the disputed period and maintained records which were furnished by the appellant during inquiry, in that view, nothing prevented department from verifying returns and raising query within normal period of limitation. It is further observed that there is no such specific finding in the show cause notice of wilful suppression of facts by the appellant except contending that it would not have come to the knowledge of department if the data from income tax returns were not received from income tax department. In this background, it cannot be alleged that appellant has wilfully suppressed facts from department with intention to evade tax. Therefore the demand is not sustainable on the ground of limitation. Without prejudice to the above finding, we further find that the transport in the present case was undertaken by the owners of the transport vehicles and no consignment note was issued. The transportation in the present case not being under GTA is not liable to service tax in terms of the above specific item in the negative list. Therefore for this reason also the transportation service in the facts of the present case is clearly not taxable. As per our above discussion and finding, the demand is not sustainable.

Summary

Issues:
1. Service tax demand upheld based on income tax data and form 26AS for GTA services.
2. Contention regarding limitation period for the show cause notice.
3. Allegation of suppression of facts by the appellant.
4. Applicability of service tax on transportation services under the negative list.

Analysis:
1. The appellant contested the service tax demand of Rs. 15,40,097 for the period 2016-2017, arguing that it was solely based on income tax data and form 26AS without an independent examination of the consideration received against the services provided. The appellant relied on legal decisions to support this argument, emphasizing the need for a thorough assessment beyond tax data.

2. The appellant raised the issue of the limitation period for the show cause notice, claiming it was served late. The appellant argued that the notice, dated 13-10-2021, was not served until directed by the tribunal, making the demand for the period 2016-2017 beyond the maximum 5-year limitation. The appellant cited legal precedents to support this contention.

3. The appellant further argued that there was no suppression of facts on their part, as the demand was based on maintained records within the knowledge of the department. The appellant referenced legal decisions to support the claim that the show cause notice, demanding tax beyond the normal limitation period, was barred under the relevant provisions of the Finance Act, 1994.

4. The tribunal analyzed the case and found that the transportation services provided by the appellant did not fall under the category of Goods Transport Agency (GTA) services as per Section 66D (p) of the Finance Act, 1994. Since the transport was undertaken by the owners of the vehicles without issuing consignment notes, it was covered under the negative list of services and not liable for service tax. The tribunal set aside the impugned order based on this finding, concluding that the demand was not sustainable due to the nature of the transportation services provided.

In conclusion, the tribunal allowed the appeal, setting aside the service tax demand upheld by the Commissioner (Appeals) based on income tax data and form 26AS. The decision was primarily influenced by the non-applicability of service tax on the transportation services provided by the appellant, as they did not fall under the category of Goods Transport Agency services outlined in the negative list of services under the Finance Act, 1994.