Adventure Gurudongma Vs Commissioner of C.G.S.T. and Central Excise (CESTAT Kolkata)
The appeal concerns the validity of a Service Tax demand confirmed against the appellant based on discrepancies between figures reported in Income Tax Returns (ITR)/Form 26AS and ST-3 returns for the financial year 2015–16. The demand of ₹1,28,844 (inclusive of cess), along with interest and penalty, was upheld by the Commissioner (Appeals), leading to the present appeal before the Tribunal.
The case originated from scrutiny of third-party data received from the Income Tax Department, where a difference was observed between the gross receipts declared in ITR/Form 26AS and those reported in ST-3 returns. Based on this difference, the department alleged short payment of Service Tax and issued a show cause notice dated 05.10.2020 demanding tax along with interest and penalty. The adjudicating authority confirmed the demand, and the appellate authority upheld it to the extent of ₹1,28,844.
The appellant contended that the discrepancy arose due to accounting treatment of advances. It was submitted that advances received in earlier periods were carried forward in the books of account and reflected in the balance sheet for the relevant financial year. As per the Point of Taxation Rules, 2011, Service Tax had already been paid when such advances were initially received. However, the department treated these carried-forward advances as fresh receipts for the financial year 2015–16 and demanded tax again. The appellant also furnished a reconciliation statement explaining the difference between ITR and ST-3 returns, which was not considered by the lower authorities.
