2023 (2) TMI 1157 - HC - Service Tax

Court orders reconsideration of tax application for transportation services under Mega Exemption Notification

ANUP TRADE AND TRANSPORT PVT. LTD. Versus UNION OF INDIA AND ANR, PRINCIPAL COMMISSIONER GST AND CENTRAL EXCISE COMMISSIONERATE

The Court remanded the case back to the authorities for reconsideration, allowing the petitioner to present all relevant documents. The judgment aimed to ... Recovery of service tax - services rendered by the petitioner as goods transportation and handling for the Food Corporation of India - exempted from payment of service tax under the Mega Exemption Notification No. 25/2012-ST dated 20.06.2012 w.e.f. 01.07.2012 or not - HELD THAT:- Upon due perusal of the order in M/S. N.E. LOGISTICS AND ANR. JUGAL KISHORE MAHANTA VERSUS UNION OF INDIA AND 2 ORS. THE PRINCIPAL COMMISSIONER GST AND CENTRAL EXCISE COMMISSIONERATE GUWAHATI [2022 (3) TMI 1157 - GAUHATI HIGH COURT] and GB CHOWDHURY HOLDINGS PVT LTD VERSUS THE UNION OF INDIA AND ANR, PRINCIPAL COMMISSIONER GST AND CENTRAL EXCISE COMMISSIONERATE [2022 (4) TMI 510 - GAUHATI HIGH COURT] respectively, this Court is of the view that this writ petition can also be disposed of in similar terms by interfering with the impugned order and remanding the matter back to the respondents authorities. This Court proposes to dispose of this matter in terms of the orders passed by the Co-ordinate Bench in view of the fact that a perusal of the Mega Exemption Notification dated 20.06.2012 reveals that in respect of the services stated to be rendered by the petitioner as transporter of goods, the service tax is payable by the recipient of such services. This Court is of the view that the matter can be remanded back to the authorities who will re-consider the matter afresh and pass appropriate orders. The petitioner will appear before the respondent authority on 13.03.2023 on which date the Principal Commissioner, CGST & CX, Guwahati will proceed for hearing of the matter afresh - Petition allowed by way of remand. Issues:1. Demand of service tax by the respondent authority for the period of 2015-16 from a private limited company.2. Dispute regarding exemption of service tax under Mega Exemption Notification No. 25/2012-ST for transportation services to the Food Corporation of India.3. Allegation of violation of natural justice and inadequate opportunity for furnishing documentary evidence.4. Comparison with similar cases where demands were interfered with and remanded back for fresh determination.Analysis:1. The petitioner, a private limited company engaged in transportation works with the government and public sectors, received a demand-cum-show cause notice for service tax recovery of Rs.6,21,17,337/- for the period of 2015-16. The petitioner contended that services provided to the Food Corporation of India are exempted from service tax under the Mega Exemption Notification. However, the respondent authority confirmed the demand, imposing interest, penalty, and a violation penalty under the Finance Act, 1994.2. The petitioner argued that the impugned order was against the law as transportation services to FCI are exempted under the Mega Exemption Notification. The petitioner claimed that all necessary documentary evidence was available and would be produced during the hearing. Despite submitting the reply online during the COVID-19 pandemic, the authority passed the order without allowing the submission of necessary documents, violating natural justice and the Finance Act, 1994.3. The petitioner's counsel contended that the impugned order lacked adequate opportunity for submitting documentary evidence, necessitating interference and setting aside of the order. Reference was made to similar cases where Co-ordinate Benches of the Court had remanded matters back to authorities for fresh determinations after affording opportunities to produce relevant material in support.4. The standing counsel for the GST did not dispute the contentions raised by the petitioner and acknowledged the decisions of the Co-ordinate Benches in similar matters. Consequently, the Court decided to dispose of the writ petition by remanding the matter back to the authorities for reconsideration, allowing the petitioner to furnish all relevant documents before a fresh hearing. No coercive action was to be taken until the matter was reconsidered and appropriate orders were passed based on the Mega Exemption Notification.In conclusion, the Court intervened, remanding the matter back to the authorities for a fresh determination, considering the exemption under the Mega Exemption Notification and ensuring the petitioner's right to present all relevant documents. The judgment aimed to uphold principles of natural justice and proper application of tax laws in the context of transportation services provided to the Food Corporation of India.