High Court
Bombay HC Quashes Rs. 1.26 Crore Service Tax Demand For Failure To Comply With Pre-SCN Process
The Bombay High Court on 12 March, quashed a service tax show cause notice, holding that failure to conduct mandatory pre-show cause notice (pre-SCN) consultation, as required under CBEC circulars, vitiates the entire proceedings. A Bench of Justices G. S. Kulkarni and Aarti Sathe held that pre-SCN consultation, mandated by circulars issued under Section 37B of the Central Excise Act, is a binding requirement and cannot be bypassed merely because summons were issued to the taxpayer. The Bench...
CESTAT Bangalore Allows Flyjac Logistics Appeals; Freight Margin, Forex Gains Not Subject To Service Tax
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Bangalore, has recently allowed appeals filed by Flyjac Logistics Pvt. Ltd., holding that freight margin and foreign exchange fluctuation gains cannot be treated as consideration for service tax. Observing that the issue is no longer res integra, the tribunal held, "Since, these issues are squarely covered by the decisions of this Tribunal in appellant's own case vide Final Order No. 20650/2024 dated 23.07.2024 and...
Technical Glitch On Portal Cannot Deprive Taxpayer Of Sabka Vishwas Scheme Benefit: Bombay High Court
The Bombay High Court on 11 March held that the benefit of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 cannot be denied on mere technical grounds when a taxpayer is not at fault. A Division Bench comprising Justice G. S. Kulkarni and Justice Aarti Sathe allowed a writ petition by Himtaj Ayurved Pvt. Ltd and directed the authorities to issue it a discharge certificate, emphasising that the scheme is a one-time measure aimed at resolving legacy disputes and ensuring disclosure of...
Tobacco Board Auction Fee Is Statutory Levy, Not Taxable Service; No Service Tax Payable: CESTAT Hyderabad
The Hyderabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that statutory fees collected by the Tobacco Board for conducting auctions of Virginia tobacco cannot be treated as consideration for taxable services and, therefore, are not liable to service tax.The bench consists of Judicial Member Angad Prasad and Technical Member A.K. Jyotishi, who observed that the Tobacco Board was performing statutory and regulatory functions under the governing legislation...
Service Tax Cannot Be Demanded Solely Based On Form 26AS Data Without Inquiry: Gauhati High Court
The Gauhati High Court on 20 February, held that the Revenue Department cannot demand Service Tax from a taxpayer, solely on the basis of information provided in Form 26AS. The Division Bench of Justice Michael Zothankhuma and Justice Shamima Jahan heard an appeal filed by the Principal Commissioner of CGST, Dibrugarh, against a CESTAT Kolkata order that had set aside a service tax demand of Rs. 6,39,09,190 imposed on a contractor. The Bench held: “The show cause notice dated 21.10.2019 and...
No Service Tax Exemption Where Overriding Commission Is Received In INR: Madras High Court
The Madras High Court held that travel agents acting as General Sales Agents (GSAs) for foreign airlines cannot claim service tax exemption as an export of services when their overriding commission is received in Indian Rupees rather than convertible foreign exchange, even if the services are provided to foreign principals. A Division Bench of Justice Anita Sumanth and Justice Mummineni Sudheer Kumar held that exemption notifications are to be strictly construed, and the condition requiring...
Service Taxability Appeals Lie To Supreme Court, Not High Court: Delhi High Court Reiterates
The Delhi High Court has dismissed a service tax appeal filed by the Revenue, holding that questions relating to taxability fall outside the High Court's appellate jurisdiction under Section 35G of the Central Excise Act, and can be examined only by the Supreme Court.A Division Bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul observed, “we have gone through the judgments cited by the counsel for the respondent in the matter of M/S Konark Exim Pvt. Ltd (referred supra). In the said matter,...
Delhi High Court Upholds CESTAT Order Allowing Verification Of Tax Exemption On Services To Foreign Embassies
The Delhi High Court has recently upheld an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) permitting verification of certificates for claiming service tax exemption on services rendered to foreign embassies and diplomatic missions.A Division Bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul held that no substantial question of law arose from the CESTAT's decision, which had remanded the matter to the adjudicating authority for the limited purpose of...
"Unexplained Delay": Rajasthan High Court Quashes Service Tax Order Passed Nine Years After Show Cause Notices
The Rajasthan High Court has recently set aside a service tax demand raised nearly nine years after issuance of show cause notices, holding that revival of proceedings after prolonged administrative dormancy amounts to an arbitrary exercise of power and defeats the statutory discipline prescribed under the Finance Act. A Division Bench of Justice Arun Monga and Justice Yogendra Kumar Purohit quashed an order dated October 24, 2019 passed by the Joint Commissioner, Central Excise and Goods and...
Bombay High Court Reiterates That Service Tax Is Not Applicable On Legal Services
The Bombay High Court recently allowed a writ petition filed by an advocate, holding that legal services rendered by an advocate are exempted from levy of service tax. On 5 February, a Bench of Justice G.S Kulkarni and Justice Aarti Sathe held that the proceedings were squarely covered by the Court's earlier decision in Advocate Pooja Patil v. Deputy Commissioner. The Court observed: “8. The present proceedings also would stand covered by such notifications and the position in law as held by...
Service Tax On Ocean Freight In CIF Imports Illegal: Karnataka High Court
The Karnataka High Court has held that service tax cannot be levied on ocean freight in imports made on a CIF (Cost, Insurance and Freight) basis, as such services fall outside the scope of the Finance Act, 1994.“The Act itself would be inapplicable to territories other than India and the Executive would not have the power to make rules for territories beyond India and where the events could be described to be extra territorial events i.e., service provided by a foreign exporter and a...
Superintendent Cannot Adjudicate Cases Involving Extended Limitation: Calcutta High Court
The Calcutta High Court on 2 February held that cases that invoke the extended period of limitation are expressly excluded from the adjudicatory powers of a Superintendent, even if the demand falls within their monetary limit. Justice Om Narayan Rai, allowed a writ petition filed by the partners of Radiant Security, challenging an order by which the Superintendent, CGST, demanded service tax of Rs. 72,000 along with education cess and secondary and higher secondary cess, and imposed penalties...