Technocom Vs Union of India (Gauhati High Court)
The writ petition was filed by a partnership firm engaged in executing railway contracts that challenged an Order-in-Original dated 28.06.2022 confirming a service tax demand of ₹9.37 crore, along with interest and an equal amount of penalty, for the financial year 2016-17. The demand was based on allegations that the petitioner had suppressed the taxable value of services by reporting substantially lower figures in its ST-3 returns compared to receipts reflected in Form 26AS obtained from the Income Tax Department.
The petitioner contended that the contracts executed for the Railways were exempt from service tax under Entry 14(a) of Mega Exemption Notification No. 25/2012-ST. It submitted that this position, along with supporting work orders, audited financial statements, contracts, and other documents, had been placed before the adjudicating authority. The petitioner also stated that service tax had been paid on AMC services wherever applicable and argued that the adjudicating authority failed to consider these materials before passing the order.
A central argument was that service tax liability cannot be determined merely from Form 26AS. According to the petitioner, Form 26AS only reflects tax deducted at source under the Income Tax Act and cannot establish whether the receipts relate to taxable or exempt services under the Finance Act, 1994. The petitioner argued that several receipts shown in Form 26AS related to exempt railway contracts or services on which tax liability, if any, rested on the service recipient under the reverse charge mechanism. The petitioner relied upon various judicial precedents to submit that tax cannot be imposed by inference or analogy and that liability must first be established under the statute before any assessment is made.
