Justice T.S Sivagnanam of Madras High Court has slammed Service Tax department for passing an assessment order in most arbitrary and cryptic manner.
The petitioner has challenged the Order-in-Original dated 18.02.2016, by which, the first respondent has demanded payment of Rs.8,56,920/-, being the Service Tax payable on ‘Renting of Immovable Property Service’, for the period from April 2009 to September 2011; for payment of interest under Section 75 of the Finance Act; penalty of an equivalent amount as Service Tax; and Penalty of Rs.10,000/-.
In the counter affidavit, the respondents have taken a stand that they are unable to reconcile with regard to the payments effected by the petitioner and the demand raised by them. However, the counter affidavit has not been filed by the first respondent, but by the second respondent.
The Court also criticised the department not to reconcile their own accounts.
Justice T.S Sivagnanam also said that, “It is unfortunate that Service Tax Commissionerate is unable to reconcile its own accounts and without any reservation, has filed a counter stating that the amounts paid by the petitioner do not match with the demand raised by the Department in the Show Cause Notice. As mentioned earlier, the first respondent, at an earlier point of time had not acknowledged the payments made by the petitioner and for the first time in the counter affidavit filed by the second respondent, the payments have been referred to.
The Court also observed that, “It is not known as to why the first respondent has not referred to the payments made by the petitioner in the impugned order and this appears to be for reasons best known to him. If the Department wanted the petitioner to produce their bank statements to reconcile the payments, nothing prevented the first respondent from calling upon the petitioner to do so. On the contrary, in a most arbitrary and cryptic manner, the impugned order has been passed. That apart, the payment effected by the petitioner is more than the amount demanded in the impugned order”.
While quashing the assessment order, the Court also added that, if respondents 1 and 2 are unable to reconcile the accounts in their office, it shows the manner in which the office administration is taking place.
Read the full text of the Judgment below.
