Akash Tour and Travel Vs Union of India (Patna High Court)
Patna High Court recently overturned a service tax demand of Rs. 5,27,684/- levied against Akash Tour and Travel for the financial years 2015-16 (October-March) to 2017-18 (up to June 2017). The court’s decision, delivered on a writ application, hinged on the Central Goods and Services Tax (CGST) and Central Excise (CX) department’s failure to adhere to statutory timelines for adjudicating the service tax liability, even when invoking an extended period of limitation.
The case, Akash Tour and Travel Vs Union of India, heard by Mr. Aditya Prakash for the petitioner and Dr. K.N. Singh for the respondents, challenged an order-in-original dated September 23, 2024, issued by Respondent No. 2. This order had determined the service tax liability, imposed interest under Section 75, and penalties under Sections 78 and 77(2) of the Finance Act, 1994.
Petitioner’s Core Argument: Delay in Adjudication
Counsel for Akash Tour and Travel, Mr. Aditya Prakash, presented a concise but critical argument: even when the tax authorities invoke the extended period of limitation under the proviso to Sub-Section (1) of Section 73 of the Finance Act, 1994, they are still obligated to determine the tax liability within the timeframe stipulated by Section 73(4B)(b) of the same Act. This sub-section mandates a determination “within one year from the date of notice, where it is possible to do so,” for cases falling under the extended limitation period.
