The Bombay High Court at Goa, quashed demand of service tax on failure to consider reply to Show Cause Notice (SCN) and document produced by the petitioner, M/s Vainguinim Valley Resort.
The Petitioner who is engaged in the business of restaurant/ accommodation, etc. The Petitioner (BAPL) entered into a joint venture agreement with Goa Golf Club Pvt Ltd. (GGCPL). As per the said agreement, BAPL was required to provide infrastructure and ancillary facilities for the business of M/s GGCPL for the purpose of establishing its business i.e. operating and running casino at the premises of BAPL, Goa. In the said agreement.
Respondent scrutinized the records of BAPL and it was found that BAPL had provided Support Services to M/s GGCPL and for which BAPL received the share of Gross Win. The show-cause notice to show cause as to why the levy of service tax under the category of “Support Service of Business or Commerce” as defined under Section 65 of the Finance Act, 1994 should not be levied upon them.
For earlier period, the Commissioner dropped proceedings holding that there is no service provider- service receiver relationship. Revenue filed appeal to CESTAT. CESTAT dismissed department appeal. For subsequent period, petitioner filed reply stating that joint venture agreement was terminated and did not exist during this period. However, Commissioner confirmed demand of service tax, with interest and penalty. The Petitioner, thus filed the writ petition.
The Counsel for the petitioner submitted that the Respondent failed to take into account the reply filed by the Petitioner to the show-cause notice and the document attached to it. The Counsel further submitted that the order is ex facie bad in law and made without considering the reply filed by the Petitioner. Similarly, the joint venture between the Petitioner and another partner was terminated in April 2013 itself and this fact was brought to the notice of Respondent in the reply as well as by producing the document itself.
A Coram consisting of Justice MS Sonak and Justice Bharat P Deshpande observed that “There is non-application of mind while passing the impugned order. Similarly, it is clear from the reasonings in the impugned order that Respondent failed to take into account reply and the document produced by the Petitioner to the show-cause notice, which now compelled us to quash and set aside the impugned order.”
“We quash and set aside the impugned order by remanding it to the said authority to decide it afresh by considering reply filed by the Petitioner to the show-cause notice, documents attached to it and also by giving personal hearing” the Court said.To Read the full text of the Order CLICK HERE
Vainguinim Valley Resort Vs Union of India
Case Number: WRIT PETITION NO.324 OF 2021
Date of Judgement: 13 December, 2022
CITATION: 2022 TAXSCAN (HC) 1029
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