Facts
The appellants are providing taxable service under the category of ‘Telephone Services, Business Auxiliary Services, Business Support Services, Maintenance or Repair Service, Intellectual Property Service, Transport of Goods by road and sponsorship service’. Telephone services were brought under the service tax net by the Finance Act, 1994 (FA 1994) vide Notification No. 1/94 dated 28.6.1994.
The appellant raises bills against subscribers in respect of cellular mobile telephone service for the gross amount, The trial balance of the appellant for the financial year 2004 – 2005, 2005 – 2006 and 2006 – 2007 were scrutinized in detail. It was found that there was a huge difference between credit balance items in the nature of subscriber service charges shown in the trial balance and the value of taxable services billed during the financial year 2004 – 2005, 2005 – 2006 and 2006 – 2007 as furnished by the appellant.
The timely investigations conducted by the department, the entire gamut of evasion of service tax by the appellant would not have come to light. Hence Show Cause Notice dated 14.10.2009 was issued to the appellant proposing to demand service tax.
Submissions
Advocate Krithika Jaganathan for the appellant, submitted that the demand is based entirely on the differential value arising out of the revenue figures furnished in the Trial Balance as compared to the value of taxable services as furnished in the ST-3 returns by the appellant.
She submitted that the Trial Balance and Profit & Loss Account for the financial year is prepared on ‘accrual basis’ as per the relevant provisions of the Companies Act, 1956.
Decision
The division bench of P. Dinesha, Member (Judicial) and M. Ajit Kumar, Member (Technical) said that it is not in agreement with the appellants assertion that no demand can be raised on the basis of values reflected in financial statements, especially a Trial Balance which is the issue in this case.
The bench found that after introduction of the self-assessment regime it is incumbent upon the assessee to make a truthful declaration of facts in the declarations, ST-3 returns etc. made to the department. Trust brings with it responsibility. In the event of discrepancies noticed by the department in statutory returns it is the duty of the appellant to clarify the matter to the satisfaction of the officer. It is thereafter that the onus of establishing taxability lies with the department. Hence the onus of establishing the truth of what is self-assessed and declared in a statutory Return is on the assessee (appellant).
The tribunal observed that the appellant has not disclosed any facts on which the inference was made by them. It is not disclosed whether the delay, if any, was on the part of the Adjudicating Authority or caused by the appellant themselves. This is even more relevant as it was pointed out in the impugned order that the appellant was not diligent in responding to the queries of the Department in reconciling the Trial Balance with the ST 3 Return. Further whether there was any legal requirement not to adjudicate the matter during a particular period etc. has not been disclosed. They have also not referred to any provision in the Act that permits statutory authorities to set aside the impugned order based on delay, if any.
The bench remanded the matter back to the Original Authority for de novo adjudication.
Case title: M/s. Vodafone Idea Ltd v/s Commissioner of GST & Central Excise
Citation: Service Tax Miscellaneous Application No. 40284/2023 And Service Tax Appeal No.41929/2017
