2025-VIL-1101-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax - Mismatch in Form 26AS and ST-3 returns, Issue of Show cause notice based on information from the Income Tax Department - The SCN's figures, derived from Form 26AS, did not match for all years except 2016-17. The appellant contended that the incorrect figures in the SCN rendered it illegal - Whether a service tax demand is sustainable when the initial Show Cause Notice contains incorrect financial figures, despite subsequent corrections by the appellate authority – HELD - the Original Authority had failed to properly examine the appellant's records and submissions, instead simply confirming the demand based on information from the Income Tax Department - It is the responsibility of the executive to examine records and audit objections with reference to the facts of the case to determine if there is a sustainable basis for issuing a show cause notice. The charges in the SCN must be based on the assessee's books of account, records, and other admissible evidence and transactions recorded in the books of account cannot be held contrary to the facts - Further, without examining the reasons for differences between figures in Form 26AS and ST-3 returns, the Revenue cannot raise a demand solely based on such differences without establishing that the entire amount received was consideration for services provided and without examining whether the difference was due to any exemption or abatement - In addition, Section 67 of the Finance Act specifies that the value of taxable service should be the consideration in money charged by the service provider. It is crucial to determine the value on which service tax should be levied and this determination must consider activities covered by the negative list, exemptions, and the possibility of service tax being paid by the recipient. Therefore, arriving at the correct value of taxable service that has not suffered service tax is the essential first step, and this exercise was not undertaken in the present case - the impugned order is not sustainable and set aside - the appeal is allowed
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GST changes in July '25
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