SRI. ARUL SAKTHI TRADERS Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner is engaged in the business of trading in sugar. In the course of its business, the petitioner has to pay freight charges for consignments of sugar received as part of their business. The transport agencies, who transport sugar to the petitioner's business premises are liable to pay service tax in respect of such transport of goods in accordance with the provisions of the Finance Act, 1994, as amended. According to the petitioner, as per Rule 2(1)(d)(v) of the Service Tax Rules, in the case of services rendered by a goods transport agency to the particular categories of persons specified therein, the receiver of the services, whether the consignor, or the consignee of the goods transported, was prescribed as the person liable to pay tax under the Rules. In all other cases, the service tax has to be paid by the goods transport agency itself.

(2.) THE petitioner contends that this position of law has also been clarified by the 1st respondent through Circular No. 79/9/2004 -S.T., dated 17 -12 -2004. By a notice dated 21 -8 -2007, the petitioner was informed by the 3rd respondent that the petitioner was obliged to pay service tax on the value of taxable services for transportation of goods by road in a goods carriage, rendered by the goods transport agencies and the petitioner was directed to furnish various documents before the 3rd respondent for the purpose of assessment of service tax. The petitioner raised a contention that the provisions relating to service tax are not applicable to the petitioner in this particular case. The grievance of the petitioner in this writ petition is that despite such specific contention raised by the petitioner, without considering the question of applicability, the 3rd respondent is proceeding with the assessment of service tax on the petitioner, for which purpose an investigation process has been initiated. The petitioner's contention in this writ petition is that without first determining the issue of applicability, the 3rd respondent cannot proceed with the investigation process, the petitioner therefore seeks the following reliefs.

(3.) THE 2nd respondent is directed to decide the question of applicability of the provisions relating to the service tax to the petitioner, in accordance with the Finance Act, 1994, Service Tax Rules and the circular referred to above first before quantifying the amount. The petitioner shall be served with an order on the question of such applicability before directing the petitioner to produce details and conducting investigation on the assessment of the amount of service tax.