Commissioner of Service Tax Vs Quick Heal Technologies Limited (Supreme Court of India)
The Hon’ble Supreme Court of India in the matter of Commissioner of Service Tax Delhi v Quick Heal Technologies Limited [Civil Appeal No. 5167 of 2022 dated August 5, 2022] has held that Service Tax cannot be levied again on antivirus software sold in Compact Disc (“CD”) even if free updates provided later on and also, artificial segregation of the transaction, into two parts is not tenable in law.
Facts:
The Quick Heal Technologies Limited (“the Respondent”) has registered with the Service Tax under the category of Information Technology Software Service (“ITSS”) and has engaged in the development of Quick Heal brand Antivirus Software which is supplied along with the license code either online or on the replicated CDs to the end customer in India. The Directorate General of Central Excise Intelligence (“the Appellant”) found that the Respondent had not been paying Service Tax prior to July 01, 2012 on the services covered under the category of the ITSS falling under Item no (iv) of Clause (zzzze) of Sub- Section (105) of Section 65 of the Finance Act, 1944 (“the Finance Act”), accordingly a Show Cause Notice (“the SCN”) was issued proposing a demand of INR 62,73,05,953.36 on the taxable value of INR 5,30,94,66,783. The SCN was adjudicated by the Additional Director General, DGCEI, Delhi, who, in turn, set aside the demand of Service Tax vide its Order-In-Original (“the Impugned Order”). Being aggrieved by the Impugned Order, present appeal has been filed by the Appellant.
Appellant’s Contention:
