Musician's Status as 'Service' u/s 65 B(44) of Finance Act: Madras HC rejects Harris Jayaraj's Plea to quash Service Tax Notice, remands Matter [Read Order]
Considering the matter was not adjudicated by the AA, the Madras HC remands the matter
Madras High Court – Service Tax Notice – Harris Jayaraj – Taxscan
Madras High Court – Service Tax Notice – Harris Jayaraj – Taxscan
In a recent judgment, the Madras High Court rejected Harris Jayaraj’s plea that Musician’s status does not fall under the definition of "service" as defined under Section 65B(44) of the Finance Act, 1994, and sought to quash the service tax notice.
Harris Jayaraj filed a writ petition challenging the Show Cause Notice issued by the Directorate General of GST Intelligence (DGGI) under Section 73 of the Finance Act, 1994.
Harris Jayaraj, the petitioner is a well-known musician who provided services to film producers. A show cause notice dated 23.10.2018 was issued by the DGGI, Chennai, regarding the applicability of service tax on his earnings.
The petitioner challenged the SCN before the Madras High Court, arguing that his services did not fall under the definition of "service" as defined under Section 65B(44) of the Finance Act, 1994. The petitioner’s counsel also contended that the rights related to his services had already been transferred to the producers, making them outside the purview of service tax.
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The petitioner relied on the Vendhar Movies and Ors. vs. The Joint Director and Ors., 2019 case where a show cause notice (SCN) issued under similar circumstances had been quashed by the Writ Court. The petitioner’s counsel referenced the case to argue that his SCN should also be quashed.
On the contrary, the respondent's counsel argued that SCN could not be challenged at this stage, as it only called for the petitioner's response, and the matter was yet to be adjudicated.
The counsel relied on the Division Bench decision in the case of Wunderbar Films, where the court held that an SCN should not be quashed at the preliminary stage and the petitioner could raise objections during adjudication.
The bench led by Justice R. Suresh Kumar and Justice C. Saravanan noted that observed that the Vendhar Movies case had been subsequently appealed, and a Division Bench in a related case, Wunderbar Films Private Limited v. Principal Commissioner of CGST & Central Excise ruled that a show cause notice cannot be challenged. The appropriate course of action was for the petitioner to submit objections before the adjudicating authority.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
The court emphasized that the adjudicating authority would consider the petitioner’s objections and decide the matter independently and without being influenced by any court observations. Therefore, the court dismissed the writ petition, allowing the adjudication process to proceed.
The court directed Harris Jayaraj (petitioner) to respond to the SCN by filing his objections within four weeks and ordered the adjudicating authority to resolve the issue within four weeks after receiving the objections.
To Read the full text of the Order CLICK HERE
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