2026-VIL-295-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Reliance on Income Tax Returns/Form 26AS for Service Tax Demand – Dept issued SCN demanding service tax based on the value shown in ST-3 Returns vis-à-vis the summary of Form 26AS as per Income Tax Returns - Appellant contended that they have been providing 'Works Contract Service' for which they are eligible for abatement, and being a proprietorship firm, 50% of the tax liability, if any, is required to be paid by the recipient of the service on RCM basis - Whether the demand of service tax can be confirmed solely based on the data received from the Income Tax Department, without adducing any corroborative evidence to demonstrate the rendition of taxable service – HELD - The demand of service tax cannot be confirmed solely based on the data received from the Income Tax Department, such as the figures reflected in the Income Tax Returns or Form 26AS, without any independent or corroborative evidence to demonstrate the rendition of taxable service - Mere entries in the Income Tax Returns or Form 26AS cannot, by themselves, establish liability under the Finance Act, 1994, unless corroborated by evidence demonstrating the rendition of taxable service. The Service Tax and Income Tax are governed by separate and independent statutes, and the provisions of one cannot be mechanically applied to the other – Further, for the purpose of levying service tax, it is essential to clearly identify the service provider, service recipient, and the consideration paid for the service. In the absence of such evidence, the demand of service tax cannot be sustained merely on the basis of data from other statutory records, such as Income Tax Returns or balance sheets – The impugned order is set aside and the appeal is allowed
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