No demand can be made against the Assessee applying the principle of estoppel only because the Assessee had admitted the Service tax liability
In the instant case, the Revenue has filed an appeal before the Hon’ble High Court of Uttarakhand raising the question of principle of estoppel in law relating to the taxability of RS. Travels (Assessee) on the basis that services were being rendered under the rent-a-cab scheme (impugned activity) and the Assessee had admitted its Service tax liability.Whereas the Hon’ble High Court of Uttarakhand on August 6, 2014 has decided that impugned activity is not taxable in the case of Commissioner, Customs & Central Excise Vs. Sachin Malhotra, Raj Kumar Taneja, M/s. Shiva Travels [2014 (10) TMI 816 – UTTARAKHAND HIGH COURT](Shiva Travels case).
The Revenue de-linked Shiva Travels case from the present case on the basis of the fact that the Assessee had effected payments and also filed affidavits to the effect that he will be paying the balance of the amount.
However, the Assessee relied upon the judgment of the Hon’ble Apex Court in the case of Dunlop India Ltd. Vs. Union of India and others[(1976) 2 SCC 241] and Mafatlal Industries Ltd. and others Vs. Union of India and others [(1997) 5 SCC 536] and submitted that the amounts were paid under compulsion.
At the outset, the Hon’ble High Court observed that when there is only a contract of hire and there is no renting of the cab, there is no question of the Assessee being assessed in respect of services rendered in connection with rent–a-cab service as there is no renting at all.
It was further held by the Hon’ble High Court that Article 265 of the Constitution of India mandates that no tax can be levied or collected except as provided by law. Accordingly, mere fact that the Assessee had made some payments and also made promise to make further payments cannot be used against our refusing to interfere with the impugned order.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: email@example.com)