The Telangana High Court remitted the matter to the Central Tax Commissioner as no definite view can be taken and Show Cause Notice was beyond the period of limitation.
The Petitioner, Aleem Miah Works is a works contractor, carrying out such contract works with the Governmental authorities, like construction of buildings, roads, etc. According to the petitioner, all such works are indivisible composite work contracts and therefore, do not attract service tax. That apart, the Government of India has issued notifications from time to time exempting such services provided to the Governmental authorities from payment of service tax.
On the basis of information received from the Income Tax Department, the respondent has prima facie taken a view that petitioner had rendered certain taxable services and declared the value of the services in its return of income under the Income Tax Act, 1961, but as the service provider had not paid any service tax, the same has resulted in non-payment of service tax. It is in such circumstances, that the impugned show cause notice has been issued.
The petitioner submitted that the show cause notice has been issued under sub-section (1) of Section 73 of the Act. According to him, the limitation for issuing show cause notice is thirty days, which period had admittedly expired long back. Of course, under the proviso, for the reasons mentioned therein, the limitation period for issuance of show cause notice in a case where service tax not levied; or paid, or short levied, or short paid, or erroneously refunded, stands extended to five years.
The two aspects i.e., whether the petitioner had provided services to only Governmental authorities, and not others, and even if provided to Governmental authorities, whether the contracts were indivisible, or composite, and secondly whether the extended period of limitation as per the proviso to sub-section (1) of Section 73 of the Act, would be applicable or not, would depend upon the factual examination and adjudication by the adjudicating authority.
The division bench of Justice Ujjal Bhuyan and Justice Chillakur Sumalatha held that to pre-empt the adjudicating authority from carrying out the said exercise at the threshold would not be justified.
“From a reading of the show cause notice dated 18.10.2021, no definite view can be taken at this stage, that the said notice is beyond the period of limitation in terms of the proviso to sub-section (1) of Section 73. These are matters for examination and adjudication by the primary authority. In the circumstances we are of the view that it would be in the interest of justice if the petitioner is relegated to the forum of adjudication before the respondent,” the court said.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
