Amrish Rameshchandra Shah Vs Union of India & Ors. (Bombay High Court)
The Hon’ble Bombay High Court in Amrish Rameshchandra Shah v. the Union of India & ors. [Writ Petition (L) No. 2103 o 2021, dated January 27, 2021] stayed the show cause-cum-demand notice issued to a Chartered Accountant in a Writ Petition challenging the service tax demand based on Income Tax Returns (ITR) data and issued notice to the Revenue Department (Respondent).
This Writ Petition has been filed by Amrish Rameshchandra Shah (Petitioner/Assessee), a Chartered Accountant by profession and a partner in a firm, wherein the Assessee was served with a show cause-cum-demand notice dated December 30, 2020, based on the ITR filed by firm for the relevant year and the Respondent was of view that the remuneration received by Assessee from the firm is subject to service tax that has not been paid.
Petitioner has referred to a decision of the Hon’ble CESTAT, Bangalore in Alpa Management Consultants P. Ltd. Vs. Commissioner of Service Tax [2007 (6) S.T.R. 181], where it was held that service tax cannot be recovered based on the figures shown in the ITR.
Whether show cause-cum-demand notice for recovery of service tax can be issued based on ITR.
The Hon’ble Bombay High Court in Writ Petition (L) No. 2103 of 2021, dated January 27, 2021 held as under:
- Issued notice to the Respondents to file their reply by the next date.
- Stayed the impugned show cause-cum-demand notice dated December 30, 2020.
- Listed the matter on March 15, 2021 for the hearing.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
1. Heard Mr. Prakash Shah, learned counsel for the petitioner.
2. Challenge made in this Writ Petition is to the show cause- cum-demand notice issued by respondent No.3 on 30.12.2020 to the petitioner.
3. On a query by the Court as to why petitioner has not filed reply to the show-cause notice and instead has invoked writ jurisdiction of this Court, learned counsel for the petitioner submits that the impugned show cause-cum-demand notice has been issued without jurisdiction. His contention is that petitioner is a Chartered Accountant by profession and is a partner in a firm. The firm had filed income tax return and has paid service tax. Based on the declaration made in the income tax return, a view has been taken by respondent No.3 that the remuneration received by the petitioner from the firm is subject to service tax and since this has not been paid, impugned show cause-cum-demand notice has been issued.
4. Learned counsel for the petitioner has referred to a decision of the Central Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore in Alpa Management Consultants P. Ltd. Vs. Commissioner of Service Tax, 2007(6) S.T.R. 181, where CESTAT has held that service tax cannot be recovered based on the returns shown in the income tax returns. He further submits that appeal filed by the service tax department before the Karnataka High Court was dismissed on the ground of maintainability whereafter service tax department approached the Supreme Court. Supreme Court dismissed the civil appeal filed by the Commissioner of Service Tax.
5. Issue notice.
6. Mr. J. B. Mishra, learned counsel waives notice for all the respondents.
7. Let the respondents file their reply affidavit by the next date.
8. In the meanwhile, there shall be stay of the impugned show cause-cum-demand notice dated 30.12.2020.
9. Stand over to 15.03.2021.
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