SIGN IN SUBSCRIBE

News Update

Elected Women of PRIs to Participate in CPD57 in New YorkIndia, New Zealand to have deeper collaboration in Pharma, Agriculture and Food ProcessingIndia’s manufacturing PMI marginally slides to 58.8 in April monthDefence Secretary & Secretary General of MoD, Indonesia to co-chair 7th Joint Committee meetingAbove 7000 Yoga enthusiasts practised Common Yoga Protocol in SuratManeka Gandhi declares assets worth Rs 97 Cr and files nomination papers from SultanpurGlobal Debt & Fiscal Silhouette rising! Do Elections contribute to fiscal slippages?ISRO study reveals possibility of water ice in polar cratersGST - Statutory requirement to carry the necessary documents should not be made redundant - Mistake committed by appellant is not extending e-way bill after the expiry, despite such liberty being granted under the Rules attracts penalty: HCBiden says migration has been good for US economyGST - Tax paid under wrong head of IGST instead of CGST/SGST - 'Relevant Date' for refund would be the date when tax is paid under the correct head: HCUS says NO to Rafah operation unless humanitarian plan is in place + Colombia snaps off ties with IsraelGST - Petitioner was given no opportunity to object to retrospective cancellation of registration - Order is also bereft of any details: HCMay Day protests in Paris & Istanbul; hundreds arrestedGST - Proper officer should have at least considered the reply on merits before forming an opinion - Ex facie, proper officer has not applied his mind: HCSaudi fitness instructor jailed for social media post - Amnesty International seeks releaseGST - A Rs.17.90 crores demand confirmed on Kendriya Bhandar by observing that reply is insufficient - Non-application of mind is clearly written all over the order: HCDelhi HC orders DGCA to deregister GO First’s aircraftGST - Neither the SCN nor the order spell the reasons for retrospective cancellation of registration, therefore, they are set aside: HCIndia successfully tests SMART anti-submarine missile-assisted torpedo systemKiller heatwave kills hundreds of thousands of fish in Southern VietnamHong Kong struck by close to 1000 lightningColumbia Univ campus turns into ‘American Gaza’ - Pro-Palestinian students & counter-protesters clashMissile-Assisted Release of Torpedo system successfully flight-tested by DRDO
 
ST - Recovery notice u/s 87 to Service recipient seeking to recover tax from performance guarantee invoked - When there are no dues payable to Service providers, Sec 87 cannot be invoked: HC

By TIOL News Service

AHMEDABAD, JULY 19, 2016: FOOD Corporation of India filed a Writ Petition in High Court, challenging various letters issued by the Service Tax authorities, seeking to recover service tax of Rs.5.37 crores from the petitioner.

FCI had engaged one Kailash Enterprise for handling of wheat cargo during the year 2006-07. Case of the petitioner is that such service provided by Kailash Enterprise was exempt from payment of service tax, despite which, under mistaken belief, FCI was made to pay service tax of Rs.5.37 crores which Kailash Enterprise recovered from FCI. However, Kailash Enterprise had not deposited such service tax with the service tax authorities. Proceedings were therefore, instituted against Kailash Enterprise for recovery of such service tax so collected.

It appears that between FCI and Kailash Enterprise there were multiple disputes of deficiency in service provided by the service provider. The FCI by the year 2011-12 had also realized that the service tax collected by Kailash Enterprise was not deposited in the government revenue. Inter alia, on such grounds, sometime in the year 2011, FCI utilized the performance bank guarantees issued by Kailash Enterprise to FCI and recovered a sum of Rs.3,52,45,420/-

The Government seeks to recover from FCI said sum of Rs.3,52,45,420/- under section 87 of the Finance Act, 1994.

After hearing both sides, the High Court held:

+ perusal of Sec 87 would show that the powers vested with the Central Government are in the nature of garnishee enabling Central Government to recover unpaid dues of a person liable to pay the sum to the Government from any other person or requiring any other person from whom money is due or may become due to such defaulting person. The fundamental question is when the Government of India wrote letters to the FCI in the year 2015 and onwards, was there any due of Kailash Enterprise from FCI? The answer is obviously in the negative. Section 87 of the Finance Act, 1997 was therefore wrongly invoked.

Accordingly, the High Court quashed the impugned notices issued under Sec 87.

(See 2016-TIOL-1426-HC-AHM-ST)


POST YOUR COMMENTS
   

TIOL Tube Latest

TIOL Tube
Shri N K Singh, recipient of TIOL FISCAL HERITAGE AWARD 2023, delivering his acceptance speech at Fiscal Awards event held on April 6, 2024 at Taj Mahal Hotel, New Delhi.

TOP NEWS

AR not Afar by SK Rahman

VISION 360



Shri Ram Nath Kovind, Hon'ble 14th President of India, addressing the gathering at TIOL Special Awards event.

TII LATEST

TIOLCORPLAWS LATEST