Anup Trade And Transport PVT. LTD. vs. Union Of INDIA And Anr.

Facts

The petitioner, Anup Trade and Transport Pvt. Ltd., challenged a demand-cum-show cause notice dated April 26, 2021, issued by the respondent GST authority. The notice demanded recovery of service tax amounting to Rs. 6,21,17,337/- for the period 2015-16, along with interest and penalty. The petitioner contended that the services rendered, specifically transportation of foodgrains for the Food Corporation of India, were exempt under Mega Exemption Notification No. 25/2012-ST dated June 20, 2012. The petitioner argued that no suppression or understatement of tax occurred. However, the respondent authority, by an order dated February 1, 2022, confirmed the demand, interest, and penalty, citing a lack of documentary evidence, despite the petitioner's reply submitted during the COVID-19 pandemic.

Held

The Court held that the matter should be disposed of in terms of the orders passed by the co-ordinate benches. The Court noted that the Mega Exemption Notification No. 25/2012-ST dated June 20, 2012, indicates that service tax is payable by the recipient of transportation of goods services, and the supplier (petitioner) is exempted. The Court acknowledged the petitioner's claim that necessary documentary evidence was available but could not be submitted due to the COVID-19 pandemic. Consequently, the Court decided to remand the matter back to the respondent authorities for a fresh re-consideration. The petitioner was directed to appear before the authority on March 13, 2023, and was allowed to furnish all relevant documents prior to the hearing. The authority was directed to pass a reasoned order after hearing the matter afresh. If the petitioner is found to be exempted, the impugned order and demand notice shall be recalled. No coercive action will be taken until the fresh hearing and order are completed. The issue of whether the petitioner is indeed exempted under the notification was not definitively decided but was to be re-examined.

Key Issues

1. Whether the impugned order confirming the demand of service tax is in violation of the provisions of the Finance Act, 1994, read with Mega Exemption Notification No. 25/2012-ST dated June 20, 2012, and principles of natural justice? Petitioner's Arguments: The petitioner argued that the services rendered were exempt under the Mega Exemption Notification. They contended that the respondent authority wrongly confirmed the demand without affording an adequate opportunity to furnish documentary evidence, especially given the COVID-19 pandemic situation which hindered timely submission. The petitioner asserted that the order was bad in law and liable to be set aside. They relied on co-ordinate bench orders in similar matters (WP(C) No. 1870/2022 and WP(C) No. 2382/2022) which remanded cases for fresh determination after allowing production of relevant materials. Revenue's Arguments: The learned standing counsel for the GST did not dispute the contentions of the petitioner regarding the co-ordinate bench orders and fairly submitted that a similar order remanding the matter back to the authority for reconsideration might be passed.