Sahitya Mudranalaya Private Limited Vs Additional Director General (Gujarat High Court)
The Gujarat High Court decided two writ petitions together because both involved the same controversy relating to service tax show-cause notices issued after the omission of Chapter V of the Finance Act, 1994 by the Central Goods and Services Tax Act, 2017.
The first petitioner in one case was engaged in the business of printing and had provided examination-related services to the Maharashtra State Board of Secondary and Higher Secondary Education, Maharashtra State Council of Examination, Gujarat Secondary and Higher Secondary Education Board, and Gujarat Technological University. The petitioners contended that these services were exempt from service tax as they related to examinations conducted by educational institutions. During the period when Chapter V of the Finance Act, 1994 remained in force, no show-cause notice relating to service tax liability had been issued. However, after the omission of Chapter V, a show-cause notice dated 20.04.2018 was issued under Section 73 of the Finance Act, 1994 read with Sections 142(8)(a) and 174 of the CGST Act.
The second petition involved a transport contractor providing vehicles for examinations conducted by various educational bodies in Gujarat. The petitioner had initially paid service tax, later obtained a refund on the ground that the services were exempt, and the Department’s appeal resulted only in directing the refund amount to be credited to the Consumer Welfare Fund on the principle of unjust enrichment. The petitioner also relied on earlier audits in which no objection had been raised regarding the exemption. Subsequently, after the omission of Chapter V, the authorities initiated an inquiry and issued a show-cause notice dated 24.04.2019, which was challenged before the High Court.
