Delhi HC: Creative Travels Pvt. Ltd. V. Union of India & Ors. W.P.(C) 16771/2022
Background:
The petition was filed by the Petitioner Creative Travels Pvt Ltd, challenging a show cause notice (SCN) issued under the proviso to Section 73(1) of the Finance Act, 1994. The dispute revolves around the imposition of service tax. The tax was sought to be levied on amounts spent by the petitioner for operational costs of overseas offices and payments received for arranging outbound tour services.. A key point to note is that the SCN being challenged was not an isolated incident. It was, in fact, the fifth in a series of SCNs issued Petitioner, all pertaining to similar issues of service tax liability. The Impugned SCN under scrutiny was issued for the period of April 2014 to June 2017.
Decision:
The High Court ruled in favor of Petitioner, allowing their writ petition and quashing the show cause notice (SCN) dated 17 October 2019; the court’s decision was grounded in the finding that the extended period of limitation under Section 73(1) of the Finance Act, 1994, was incorrectly invoked by the respondents as the facts are known to the Department, as the court found no evidence of willful suppression of facts by the petitioner, given that the issues in the SCN were substantially the same as those in previous notices and the petitioner’s position had been consistent throughout.
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