demanding consolidated tax amount under two sections

[jagannath prasad]

The adjudicating authority has ordered for recovery of certain tax amount under section 73 A read with section 73(1) (as mentioned in scn) without bifurcating the amount. Since provisions of both sections are completely different, my query is that 1. can a single amount be confirmed under two different sections just by adding 'read with' in between them,particularly when amount due under 73A has to be first determined under 73A(4) and then the person shall pay the amount so determined.If not, is such order liable to be quashed?

How far is adjudicating authority correct in ordering for recovery without first determining the liability under different sections having different provisions.

I would be grateful if some case law is cited in any of the above circumstances.

[Rajagopalan Ranganathan]

Sir,

Section 73A talks about service tax tax collected by a service provider from the service receiver but not paid to Government. Section 73 talks about service tax not levied or paid or short-levied or short-paid or erroneously refunded. If you have collected service tax from your customer but did not deposit the same to Government it will become service tax not paid. Therefore in my opinion what the Department has done, that demanding the same amount both under Section 73 and 73 A is correct.

[YAGAY andSUN]

Yes, Department can mention such section to raise the Demand and also for the extended period to tackle the limitation aspect.

[jagannath prasad]

Sir,

demand under proviso to section 73(1) is confirmed under section 73(2) and also attracts penalty under section 78 which is equal to duty and demand under 73A is confirmed under 73A(4) and there is no provision for penalty in such cases.If demand under both sections are not given separately, then how will the penalty be determined? Also if confirmation of demand is under different sections, then naturally the demand has tbe quantified under those sections.

[YAGAY andSUN]

Will, plea of quantification is a good point to raise. While replying to SCN you can raise your contention on this issue. Anyhow, you need to submit your reply and you may raise your contentions on limitation also.

[KASTURI SETHI]

Sh.Prasad Ji,

It is a very good point de jure. Case already decided. Now you want strong grounds of appeal i.e. foundation of appeal. Revert soon.

[KASTURI SETHI]

Dear Sir,

It is a serious lapse on the part of the Adjudicating Authority/Department.Total Liability stands determined under both Sections. Both sections tagged with the phrase, "Read with". No chance of any benefit on account of this mistake from any appellate authority. Demands under both Sections should have been confirmed separately. Maximum corrigendum can be got issued. Nothing else.

Since both Sections have been invoked in the SCN, so no benefit for filing appeal on this ground.

[jagannath prasad]

Sh Kasturiji,

In defense reply, I had raised the point that since both sections had completely different provisions, they cannot be tagged under single quantification but the adjudicating authority just ignored this point. therefore, I want to make it a ground for appeal. what is your opinion.

[YAGAY andSUN]

You may expect relief at Tribunal Level as up-to Commissioner Appeals level it is not expected as they are pro-revenue people. You can file appeal by incorporating all plea which strengthen your contentions as in law you never know which plea would work for your defence.

[KASTURI SETHI]

Sh.Jagannath Prasad Ji,

Sir, I have deeply studied your issue. In my view, no use of filing appeal on this ground. Mistake is there but it cannot be taken as ground for filing appeal. It is a wastage of time, money and energy.

Both Sections have been mentioned in OIO. I agree with you that both Sections 73 and 73 A cannot be tagged but at the same time if you file appeal on this ground you will be on a weak wicket.

 

[Ganeshan Kalyani]

I agree with the views of Sri Kasturi Sir. Also see the amount involved in this case. Also see the cost of litigation. Sometime it is better to pay and conclude the issue if the demand amount is minimal and the cost of litigation is much more than that.