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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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PJ/CASE LAW/2016-17/3127

Whether engaging drivers for transportation of goods on private trucks amounts to provision of GTA service?

Case:-M/s SVR ELECTRICALS PVT LTD Vs COMMISSIONER. C & CE, GUNTUR

Citation:-   2016-TIOL-1281-CESTAT-HYD
 
Brief Facts:-The appellants are engaged in the manufacture of Electrical Distribution Transformers and are registered for the category of Goods Transport Agency Service. During the course of audit it was observed that appellants had entered into contract with M/s Nepal Electricity Authority, Nepal for supply of 628 nos. of electrical transformers. The contract value was inclusive of transportation charges of Rs.69,00,000/- which was to be borne by appellants as per agreement between appellant and M/s Nepal Electricity Authority. The appellants contested the demand of service tax stating that duty having been paid on FOR basis they are not liable to pay service tax on freight charges. On scrutiny of invoices, it was observed by department that in the invoices, the assessable value is not inclusive of freight. That appellants suppressed the value of freight by not informing the department about the freight element. A show cause notice was issued which after adjudication, confirmed the demand of service tax along with interest and also imposed equal amount of penalty under Section 78 of the Finance Act, 1994. Aggrieved by this order, the appellants preferred appeal before the Commissioner (Appeals) who vide the order impugned herein upheld the same.
 
Appellant’s Contention: -The learned counsel appearing for appellant has furnished detailed written submissions and consented /requested that the case be decided basing on the written submission. Therefore, the case was taken up for disposal, after perusal of appeal, written submissions and hearing the department representative. The main plea raised in the written submission is that the trucks were driven by drivers of the appellant. That being private trucks they do not fall within the definition of"Goods Transport Agency" . The appellant has relied on the judgment of CESTAT in Lakshmi Narayana Mining Co. Vs. CST, Bangalore 2009(16) STR 691(Tri)= 2010-TIOL-122-CESTAT-BANG. It is also submitted that the show cause notice is time barred. That there was no suppression of facts on the part of the appellant. The freight charges were shown in the invoices and these invoices were signed by the jurisdictional Officer and the same was also declared in the I.T. Returns. That therefore, the demand is time barred.

Respondent’s Contention:-The learned DR Shri M.S. Naskar contended that the decision in Lakshmi Narayana Mining Company case (Supra) is no longer good law. That the Hon'ble High Court of Madras in CCE, Salem Vs Suibramia Siva Co-operative Sugar Mills Ltd. 2014 (35) STR 500 (Mad) has held that the use of the word "any person" in the definition of "Goods Transport Agency" includes individual truck owners also. Similar view was taken in the case of Sree Balaji Transport Vs CCE & ST, Tirupathi 2015 (38) STR 651 (Tri-Bang). In the case of Sree Balaji Transport, the tribunal examined the issue whether transportation undertaken by individuals owning and operating lorry and truck is subject to service tax. The Tribunal observed that under Section 60(506), Goods Transport Agency means "any person who prides service in relation to transport of goods by road and issues consignment note, by whatever name called" . The language of the section is unambiguous and that 'any person (including individuals) who provides service in relation to transport by road is liable to service tax".
 
Reasoning Of Judgment: -The Tribunal heard the contentions and concluded that in view of judgments relied upon by the DR, on merits, the issue is against the assessee. The next ground raised is that the show cause notice dated 15-09-2009 for the period 20-05-2008 to 16-06-2008 is barred by limitation. The appellant contends that there was no suppression with intention to evade payment of service tax. It is the case of the appellant that the freight charges were shown in the invoices and that these invoices were signed by the jurisdictional officer. As per the agreement the appellant has agreed to bear the transportation charges. The appellant is registered for "Goods Transport Agency Services". In the invoices, the appellant has shown the freight charges separately. But the appellant failed to discharge the service tax liability on the freight charges collected. In such score, the invocation of extended period of limitation is legal and proper.
 
In view of the above, it was found that the impugned order does not call for any interference. In the result, the appeal is dismissed.
 
Decision:-Appeal dismissed.

Comment:-The essence of the case is that since in view of judgments wherein service tax is payable even in case of individual truck owners,  the appellant suppressed the value of freight by not informing the department about the freight element. Since, the appellant failed to discharge the service tax liability on the freight charges collected when service tax was to be discharged by them, it is clear case of non-payment of service tax. Furthermore, the invocation of extended period of limitation is also legal and proper and the appeal fails on merits as well as limitation.
 
Prepared By:- Alakh Bhandari
 
 
 
 
 
 
 
 

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