The Commissioner vs. The Assistant Commissioner

Held

The Court held that since the parent assessment order dated 30.11.2013 had become final and the petitioner's appeal against it was dismissed as time-barred, and crucially, the petitioner could not confirm the existence of any interim order against the parent order, the challenge to the consequential recovery proceedings was not maintainable. The Court observed that the petitioner's reliance on the Supreme Court's order dated 14.10.2011 in SLP(C) No. 27636/2011 was misplaced, as it pertained to an individual litigant and did not operate as a general stay order for recovery of arrears due for the period up to 30.09.2011. The Court also noted the Allahabad High Court's decision upholding the vires of the relevant provisions. Consequently, the writ petition was dismissed. No costs were awarded. The connected miscellaneous petition was also closed.

Facts

The petitioner, Kadayanallur Municipality, a local authority, owned immovable properties that it let out on rent. The first respondent, the Assistant Commissioner of CGST & Central Excise, issued a show cause notice and an assessment order dated 30.11.2013, demanding Rs. 3,21,807/- for the period from 01.06.2007 to 31.03.2011, as renting of immovable property services was taxable. The petitioner's appeal before the Commissioner (Appeals) was dismissed on 26.08.2014 as time-barred. The present writ petition challenges the consequential recovery proceedings initiated by the revenue. The petitioner could not confirm if there was any interim order against the parent assessment order.

Key Issues

1. Whether the challenge to consequential recovery proceedings is maintainable when the parent assessment order has become final and no interim order was obtained against it? (Question of law) Petitioner's contention: The petitioner argued that the issue of service tax on renting of immovable property is pending before the Supreme Court. They referred to an order dated 14.10.2011 in SLP(C) No. 27636/2011, which directed that coercive steps for recovery of arrears of service tax due on or before 30th September 2011 should not be taken, and there was no stay on future liability from 1st October 2011. However, the Court noted this order pertained to an individual litigant and might not operate as a general stay. Revenue's contention: The department contended that the assessment order has become final, and the petitioner's liability is also final. Therefore, the challenge should only be to the consequential recovery proceedings. The department also drew attention to a Division Bench decision of the Allahabad High Court in N.K. Bhasin vs. Union of India (2017 (6) G.S.T.L. 370 (All)), which held Sections 65(105)(zzzz) and 66 of the Finance Act, 1994, as amended, to be intra vires the Constitution.