AI Drafter 
TaxTMI 
TaxTMI 
2021 (3) TMI 950
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....b) Pending admission, hearing and till final disposal of this petition, Your Lordships may be pleased to direct : (i) the Respondent No.5 to hear the application on merits and dispose the same as early as possible; (ii) the Respondent Nos.3 and 4 not to take any coercive steps to recover any undue and unascertained amount of Service Tax, Interest and Penalty by way of issue of any order; (iii) stay the impugned SCN issued by the Respondent No.4 in its entirely; (iv) the Respondent No.4 to release a refund of excess payment of Service Tax paid by the Petitioner No.1; (c) any other and further relief deemed just and proper be granted in the interest of justice; (d) to provide for the cost of this petition." 2. It appears that during the pendency of the present writ-application, the impugned show-cause notice dated 22nd October 2019 issued by the respondent no.4 culminated in a final order passed by the Commissioner, Central Excise and CGST, Surat. The operative part of the final order reads thus : "ORDER 29. In view of the above discussions and findings, I hereby pass following orders : (i) I confirm the de....
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....akh only) on Shri Laljibhai Tulsibhai Patel, Director of M/s SDB Diamond Bourse, Surat, under Section 78A of the Finance Act, 1994 as amended; (xii) I impose a penalty of Rs. 1,00,000/- (Rupees One Lakh only) on Shri Jitubhai Babulal Shah, Director of M/s SDB Diamond Bourse, Surat, under Section 78A of the Finance Act, 1994 as amended; 30. As in this case service tax has already been appropriated, if interest for delayed payment of service tax is paid within 30 days of the date of receipt of this order, the penalty payable under section 78 shall be 25% of service tax as confirmed at 29(i) above if such reduced penalty is also paid within 30 days of receipt of this order. 31. This Order is passed without prejudice to any other action that may be taken against them under the Finance Act, 1994 and the rules framed thereunder or under any other law for the time being in force." 3. As the final order came to be passed confirming the demand of service tax with imposition of penalty, the Civil Application came to be filed with the following prayers : "A. Your Lordships may be pleased to allow this application; B. Your Lordships may be please....
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.... the period of limitation may file the appeal before the CESTAT at the earliest but with a distinct understanding that the CESTAT shall not proceed to hear the appeal on merits as this Court is seized of the matter. We have suggested so keeping in mind that the period of limitation is to expire in near future. 8. Having regard to the issues raised in this litigation, we direct that till the next date of hearing, no coercive steps shall be taken towards the recovery of the demand. Due to paucity of time, it is not possible to hear this matter before Diwali break. In such circumstances, let this matter be notified on 08.12.2020." 5. We have heard Mr.Tushar Hemani, the learned senior counsel, assisted by Dr.Avinash Poddar, the learned counsel appearing for the writ-applicants, and Mr.Devang Vyas, the learned Additional Solicitor General of India for the respondents. 6. It appears from the materials on record that the writ-applicant no.1 is a Section-8 Company incorporated under the Companies Act, 2013. The writ-applicants nos.2 to 8 respectively are the Directors of the Company and the writ-applicant no.9 is the Chief Financial Officer (CFO) of the Company. The Company ....
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....rs based on the concept of mutuality ? B. Whether interest and/or penalty will be leviable, as claimed by the department, when there was no liability to pay service tax, given that the amount collected was in the nature of refundable deposit till the time the land was allotted by the Government of Gujarat to SDB;" 9. The application for advance ruling was received by the Authority on 21st June 2016. It is not in dispute that although the application was heard on 11th August 2017 by the Authority, yet till this date, no final order has been passed by the Authority. 10. In such circumstances referred to above, the impugned Show-cause notice dated 22nd October 2019 came to be issued under Section 73(1) of the Finance Act, 1994, calling upon the writ-applicants to show-cause as to why (i) the service tax amounting to Rs. 24,67,98,056/- should not be demanded and recovered under proviso to sub-section (1) of Section 73 of Finance Act, 1994, by invoking the extended period of limitation; (ii) interest on the delayed payment, and (iii) penalty under Sections 78(1) and 77(1) of the Finance Act, 1994, be not imposed for the evasion of tax for the Financial Years 2014-15 to 20....
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....hairmanship of Dr. K.N. Wanchoo, recognising the need for providing Advance Ruling System, particularly in cases involving foreign collaboration. The aim was to give advance rulings to taxpayers or prospective taxpayers, which would then considerably reduce the Revenue's workload and decrease the number of disputes. This finally resulted in a scheme of Advance Ruling being brought into effect in 1993, with the introduction of a new Chapter in the Income Tax Act, 1961 (hereinafter referred to as the 'IT Act'). A quasi-judicial tribunal was established as the Authority for Advance Rulings (for short 'AAR') to provide certainty and avoid litigation related to taxation of transactions involving non-residents. The scope of the transactions on which an advance ruling can be sought from the AAR has gradually increased to now include both residents and nonresidents, who can seek the same for issues having a substantial tax impact. Chapter XI-XB of the IT Act deals with advance rulings and it has been defined in Section 245N(a) of the IT Act. These rulings are binding both on the Income Tax Department and the applicant, and while there is no statutory right to appeal, the Supreme Court has ....
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.... policies, making it an aspirational international best practice standard. For example, Australia and New Zealand have a robust system of advance rulings wherein the decisions (which are public rulings affecting a large number of taxpayers) are given teeth by being made binding on the revenue authorities. New Zealand has gone a step further and innovated "status rulings" under which a taxpayer can apply to the Commissioner for a ruling on how a change in the law impacts an existing ruling. 17. In the United States, there is a mechanism for the Treasury to authorise guidance in the form of revenue rulings, procedures and notices. The mechanism again, has been bolstered by subsequent practice and interpretations of the United States courts, where rulings have indicated that taxpayers may be penalised if they act inconsistently with legal interpretations set out in the revenue rulings, procedures or notices. 18. Tax transparency has been a hallmark trait of the Swedish legal system. Swedish law requires public disclosure of ex ante tax administration such as advance rulings. Both the taxpayer as well as the Swedish Tax Agency can request an advance tax ruling, these ....
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.... However, according to Mr.Vyas, the remedy for advance ruling cannot be a ground to jeopardize or put in peril in any manner the ongoing investigation and thereby avoid the consequences of evasion of tax. 20. In such circumstances referred to above, Mr.Vyas prays that there being no merit in this writ-application, the same may be rejected and the writ-applicants may be asked to proceed further before the Tribunal. 21. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is, whether we should interfere in the present writ-application. 22. Chapter-XVII of the Act 2017 is of Advance Ruling. Section 95 provides for certain definitions. Section 95 reads as under : "95. In this Chapter, unless the context otherwise requires,-- (a) "advance ruling" means a decision provided by the Authority or the Appellate authority or the National Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 or of section 101C, in relation to the supply of goods or services or both being undertak....
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....alled for by the Authority in any case, such records shall, as soon as possible, be returned to the said concerned officer. (2) The Authority may, after examining the application and the records called for and after hearing the applicant or his authorised representative and the concerned officer or his authorised representative, by order, either admit or reject the application: Provided that the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act: Provided further that no application shall be rejected under this sub-section unless an opportunity of hearing has been given to the applicant: Provided also that where the application is rejected, the reasons for such rejection shall be specified in the order. (3) A copy of every order made under sub-section (2) shall be sent to the applicant and to the concerned officer. (4) Where an application is admitted under subsection (2), the Authority shall, after examining such further material as may be placed before it by the applicant or obtained b....