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TMI Blog2025 (2) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... JUSTICE DHARMESH SHARMA For the Petitioner : Mr. Rupesh Kumar, Sr. Adv. with Mr. Jitin Singhal & Mr. Aditya Kumar, Advs For the Respondents : Mr. R. Ramachandran, SSC with Mr. Prateek Dhir, Adv ORDER 1. The present petition has been preferred impugning the Show Cause Notice SCN dated 31 May 2024 and in terms of which the respondents have challenged the liability that would arise upon the petitioner in connection with the supply of seconded employees. For the purposes of disposing of the present writ petition, we propose to take note of the following undisputed facts. 2. The petitioner is an entity registered under the Central Goods and Services Tax Act, 2017 CGST Act and is stated to be engaged in providing diverse services such as administrative support, business auxiliary services, consulting engineering services and management consulting services. The petitioner purportedly engaged in deputing employees from foreign entities for a specified term under an arrangement involving the "secondment of employees" by means of which those seconded employees were to be employed in India for the discharge of duties in the capacity of an employee of the petitioner. 3. It is the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is made through an agent, shall- (a) be the open market value of such supply; (b) if the open market value is not available, be the value of supply of goods or services of like kind and quality; (c) if the value is not determinable under clause (a) or (b), be the value as determined by the application of rule 30 or rule 31, in that order: PROVIDED that where the goods are intended for further supply as such by the recipient, the value shall, at the option of the supplier, be an amount equivalent to ninety percent of the price charged for the supply of goods of like kind and quality by the recipient to his customer not being a related person: PROVIDED FURTHER that where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of the goods or services." 8. As is manifest from a reading of the second Proviso to Rule 28, it becomes apparent that the value declared in invoices generated by an entity receiving the requisite goods or services, in the present context the services from the seconded employees, shall be deemed to be the open market value of the said goods and services. 9. Pertinently, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Metal One Corporation and which dealt with an identical controversy is accordingly reproduced hereinbelow:- "10. The question thus stands restricted to the value to be ascribed to the supply of goods and services and which is regulated by Rule 28 of the Central Goods and Services Tax Rules, 2017. That rule is reproduced hereinbelow: "Rule 28 - Value of supply of goods or services or both between distinct or related persons, other than through an agent The value of the supply of goods or services or both between distinct persons as specified in sub-section (4) and (5) of section 25 or where the supplier and recipient are related, other than where the supply is made through an agent, shall- (a) be the open market value of such supply; (b) if the open market value is not available, be the value of supply of goods or services of like kind and quality; (c) if the value is not determinable under clause (a) or (b), be the value as determined by the application of rule 30 or rule 31, in that order: PROVIDED that where the goods are intended for further supply as such by the recipient, the value shall, at the option of the supplier, be an amount equivalent to ninety perce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service rendered would have to be treated as 'Nil'. This would lead one to the inescapable conclusion of no perceivable or plausible tax liability possibly being created. Consequently, we are of the considered opinion that the proceedings initiated in terms of the impugned SCNs' and their continuance would be futile and impractical. The impugned SCNs are essentially rendered impotent and would serve no practical purpose. 15. In view of the above, we allow the instant writ petitions and quash the impugned SCNs dated 29 September 2023 [W.P.(C) 14945/2023], 28 September 2023 [W.P.(C) 2039/2024], 27 September 2023 [W.P.(C) 4834/2024], 28 September 2023 [W.P.(C) 4979/2024] and 31 May 2024 [W.P.(C) 9801/2024] to the extent as clarified in Para 19 below. 16. We further quash the consequential impugned Orders-in-Original dated 29 December 2023 in W.P.(C) 4834/2024 and 30 December 2023 in W.P.(C) 4979/2024. 17. Insofar as W.P.(C) 4834/2024, we note that a final Order-in-Original came to be passed on 29 December 2023. The petitioner, Sony India Private Limited, had of its own violation and undisputedly, discharged the tax liability proceeding on the basis of Rule 28 and a perceived ..... X X X X Extracts X X X X X X X X Extracts X X X X
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