G N Krishna Vs Additional Commissioner of Central Tax (Karnataka High Court)
The Karnataka High Court examined a challenge to an Order-in-Original relating to service tax liability determined on the basis of inputs received from the Central Board of Direct Taxes and figures reflected in TDS statements and Form 26AS. The petitioner contended that the authority failed to properly consider Entry 13 of Notification No.25/2012-ST dated 20.06.2012 while examining the services provided. The petitioner also relied on an earlier decision in W.P.No.11154/2023 and connected petitions, where matters involving service tax demands primarily based on income tax returns had been remanded for fresh consideration.
The Court noted that the observations made in the earlier batch of petitions required consideration. In that decision, the Court had directed authorities to examine whether the petitioners qualified under Section 65B(44) of the Finance Act, 1994, whether the services fell within the negative list, whether exemptions under Notification No.25/2012-ST or other notifications applied, whether liability arose under Rule 2(1)(d), and whether the claims were barred by limitation. The earlier judgment had also clarified that all contentions on merits and jurisdiction remained open.
Relying on those observations, the Karnataka High Court set aside the impugned Order-in-Original and remitted the matter back to the stage of reply to the show cause notice. The Court directed the authorities to reconsider the matter in light of the observations made in the earlier judgment, particularly paragraph 10. It further clarified that the petitioner was at liberty to file a fresh reply to the show cause notice and directed the petitioner to appear before the respondent on 25.05.2026 without waiting for further notice.
