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TMI Blog2025 (2) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... w. The order is passed without considering several replies to show causes notices filed by the petitioner, whereby and where under question of jurisdiction on law point have seriously been raised but without answering the same the order has been passed which is a nullity in eyes of law. (ii) For issuances of writ in the nature of a writ of mandamus directing the commanding the respondent service tax authority to act within the scope and ambit of the very service tax itself. The order under challenge has been passed without examining the charging section of service tax in terms of section 66B of Chapter V of Finance Act, 1994. (iii) For issuances of an appropriate writ(s), passed such order(s) writ order as your lordship may deem fit and proper in the facts and circumstances mentioned herein/hereunder above. That the moot questions shall arise in case in hand that whether the charging section of the service act, brings license fee of which the petitioner pays to railways for getting a license of caterers in the Reverse charge Mechanism?" 2. The petitioner in the present case is a partnership firm represented through its partner. The firm was providing catering services to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act, 1994 read with Section 174 of the Central Goods and Services Tax Act, 2017 for contravention of various statutory provisions as discussed above." 4. Mr. Gautam Kejriwal, learned counsel for the petitioner, has assailed the impugned order on various grounds. It is his submission that the order as contained in Annexure '2' has been passed without examining the charging section of service tax in terms of Section 66B of Chapter V of the Finance Act, 1994 (hereinafter referred to as the 'Act of 1994'). A question has been raised as to whether all the periods covered under the demand Show Cause Notice (in short 'SCN') dated 16.04.2019 is well within statutory limitation period. Brief Facts of the Case 5. As per the SCN dated 16.04.2019 (Annexure '4'), there was an intelligence report indicating that the petitioner who is registered with the Service Tax, Patna Commissionerate had not paid service tax under Reverse Charge Mechanism (in short 'RCM') on license fee paid to Zonal Railways for catering contracts. An inquiry was initiated and a search proceeding was conducted at Patna and Delhi Office of the petitioner. From the documents collected in course of the search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Clause 'A' of Section 66D of the Act of 1994. Section 66D provided a negative list comprising of services and perusal thereof would show that the "support services" provided by the Government or a local authority to business entities are one of the services which are excluded from the negative list. Hence, it was observed that the "support services" provided to a business entity by the Government or a local authority was taxable during the period 01.07.2012 to 31.03.2016. 7. The competent authority further observed that since Section 99 of the Act of 1994 makes a special provision for taxable services provided by Indian Railways and states that notwithstanding anything contained in Section 66, as it stood prior to the 1st day of July, 2012 or in Section 66B, no service tax shall be levied or collected in respect of taxable services provided by the Indian Railways during the period prior to 1st day of October, 2012. Thus, it has been observed that "support services" provided to a business entity by the Indian Railways are taxable with effect from 01.10.2012 and in terms of the Notification No. 30/2012-ST dated 20.06.2012, the liability to pay service tax on license fee charged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared void. It was one of his submissions that in this case, the issue involved is a mere interpretation of law, therefore an extended period of limitation would not be applicable. In any case, penalty would not be imposable in the facts of the present case. 10. It appears that the petitioner was given a personal hearing on 26.09.2022. In the personal hearing, the representatives of the petitioner argued that granting license is not taxable service and no service tax is liable to be paid. The adjudicating authority, however, held that the Indian Railways provided "support services" to the licensee and these services are taxable by virtue of not being covered under Section 66D and service taxes payable on the licensee of reverse charge basis. 11. The adjudicating authority further held that in the era of self-assessment, trust is placed on the assessee to correctly self-assess their tax liability by disclosing the true values in their ST-3 returns and pay the due service tax liability but in this case the noticee did not file correct periodical returns declaring therein his actual taxable value. As a result of this non-disclosure, the Department remained unaware of such non-paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner has assailed the impugned order before this Court mainly on three grounds. His first ground is that no pre-show cause consultation was done in this case which would render the SCN void. According to him, the SCN was issued on 16.04.2019, therefore, the master circular of the year 2021 would not be applicable in case of the petitioner. 14. His second ground is that the proceeding would be barred by limitation under Section 73 (1) of the Act of 1994. The SCN could have been issued within 30 months of the relevant date and the relevant date is the date of filing of the return. According to him, this case would not be covered under proviso to subsection (1) of Section 73. He has submitted that it is not a case of fraud and willful suppression. Learned counsel relied upon the judgments of the Hon'ble Supreme Court in the case of C.C., C.E. and S.T. Bangalore and Ors. vs. Northern Operating Systems Private Limited reported in (2022) 17 SCC 90; Commissioner of Central Excise, Bangalore vs. Karnataka Agro Chemicals reported in (2008) 7 SCC 343; Cosmic Dye Chemical vs. Collector of Central Excise, Bombay reported in (1995) 6 SCC 117; Collector of Central Excise vs. H.M.M. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that in a case of evasion of tax by willfully contravening the statutory provisions, no pre-show cause consultation notice would be required and it would not be appropriate on the part of the petitioner to submit that the showcause notice would be rendered void. 18. Learned counsel submits that the challenge to the impugned order on the ground that licencing by Railways is not a support service may not be gone into by this Court at this stage in its writ jurisdiction because it will involve appreciation of the terms and conditions of the MLAs and the nature of the service being provided by the Railways to the petitioner in connection with its catering services. Consideration 19. We have heard learned counsel for the petitioner as well as learned Senior Standing counsel for the CGST & C Ex. 20. From the impugned order, it is evident that the adjudicating authority has held that this case would fall in the category of the extended limitation period. Section 73 (1) is being reproduced hereunder for a ready reference:- "SECTION 73. Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded. - (1) Where any service tax has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018. It appears that Hon'ble Delhi High Court not only entertained the writ application but also rejected the contention of the respondent that since the SCN was preceded by a search that was conducted in the business premises of the petitioner and the petitioner also rendered itself liable for penal action 'for suppression of facts and contravention of various statutory provisions with intent to evade payment of due service tax' and other incidental levies, the SCN partakes of the character of an 'offence related' SCN and therefore falls within the exceptions carved out under para 5.0 of the master circular. 22. In the case of Cosmic Dye Chemical (supra), the matter reached to the Hon'ble Supreme Court only after final adjudication by the Tribunal failed. The Tribunal in the said case had taken a view that regardless of intent, a mere suppression of facts or misstatement in the information statutorily required to be supplied to the Excise authorities attract the larger period of limitation. 23. The Hon'ble Supreme Court did not approve the views of the learned Tribunal and held inter alia as under:- "It is, therefore, not correct to say that there can be a suppression or mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent to evade duty. How to gather this intention or judge it would remain a question of fact and this issue as to whether it is a case of fraud, or wilful mis-statement, collusion or is falling under any of the clauses (a) to (b) of the proviso to sub-Section (1) of Section 73 may be properly adjudicated by either the Adjudicating authority or the Appellate Authority with reference to the materials on the record. This Court would not usurp the powers of the Appellate Authority. In our considered opinion, this Court sitting under Article 226 of the Constitution of India would refrain itself as a matter of self-restraint in conducting an enquiry as to whether it is a case of fraud or not. It is left open to be considered by Appellate Authority." 26. So far as the chargeability of service tax on the license granted by the Railways is concerned, it is the contention of learned counsel for the petitioner that licensing by Railways is not a "support service" and Section 65 (104c) which defines "support services of business or commerce" would not cover the case of the petitioner. We would quote Clause (104c) of Section 65 of the Act of 1994 hereunder:- "(104c) support services of busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised on behalf of the respondents, saying that the writ application may not be entertained as the petitioner has not availed the statutory remedy of appeal, this Court finds that in CWJC No. 4541 of 2024 (M/s Mangalmurti Constructions vs. The Union of India and others), a learned coordinate Bench relegated the petitioner to the statutory remedy of appeal on finding that the issue as to chargeability of service tax would depend upon construction of the agreement in the said case. In the case of Godrej Sara Lee Ltd. vs. Excise and Taxation Officer-cum-Assessing Authority and Others reported in 2023 SCC OnLine SC 95, the Hon'ble Supreme Court observed inter alia in paragraph '4' as under:- "4. .... It is axiomatic that the High Courts (bearing in mind the facts of each particular case) have a discretion whether to entertain a writ petition or not. One of the self-imposed restrictions on the exercise of power under article 226 that has evolved through judicial precedents is that the High Courts should normally not entertain a writ petition, where an effective and efficacious alternative remedy is available. At the same time, it must be remembered that mere availability of an altern ..... X X X X Extracts X X X X X X X X Extracts X X X X
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