M/S Manashri v. Assistant Commissioner of Central Taxes

ORDER In light of observations made above, the writ petitions relating to challenge to show-cause notice, such matters will stand relegated to the officers to be designated in terms of the observations made in para 8 above, at the same stage. Accordingly, such of the petitions at Sl.No.1 to 5 in Column No.1 of the table relating to challenge to show-cause notice are disposed off. Insofar as such writ petitions as detailed in Column 2 of the table relating to challenge to Orders-in-Original, in light of the discussion made above, the Orders-in-Original stand set aside and the matters are relegated to the Officers to be designated to be reconsidered from the stage of show-cause notice. Accordingly, such of the petitions at Sl.No.1 to 35 in Column No.2 of the table relating to challenge to Orders-in-Original are disposed off. The petitioners who are now relegated before the authorities concerned are at liberty to file their pleadings within a reasonable time as may be fixed by the Officers concerned. Wherever the matters are pending in appeal in light of the arrangement that is made, petitioners to file a memo for withdrawal of appeal and accordingly, the orders-in-original in question would also receive the same

treatment, i.e. be set aside as per the directions made above. Wherever demands have been made pursuant to the impugned orders, such proceedings are also set aside."

¶5It is noticed that the Order in Appeal has not entered into full scale adjudication, as it is observed that the petitioner herein did not appear before the adjudicating authority and place the available records including evidence and accordingly, the Order in Original was upheld without entering into the grounds as made out in the appeal. Taking note of the observations made in W.P.No.11154/2023 and also noticing that the Co-ordinate Bench was of the view that the proceedings under the Finance Act regarding demand for service tax cannot be based solely on inputs on the basis of income tax returns and after having perused para-5 of the Order in Original, the observations made in W.P.No.11154/2023 are to be extended in the present matter also.

¶6Accordingly, the Order in Original at Annexure-A is set aside, the Order in Appeal at Annexure-B is also set aside. Consequently, the recovery at Annexure-C is set aside. Matter is remitted to the stage of reply to show-cause notice. The petitioner to appear before respondent No.1 without further notice on

08.04.2026. Needless to state, the petitioner is at liberty to make out fresh reply to the show-cause notice.

¶7Authorities to take note of the observations made in the order dated

03.07.2024 passed in W.P.No.11154/20203 and connected petitions as extracted supra. The observations made at para-10 in W.P.No.11154/2023 to be looked into as well as the contention of the petitioner that the liability for service tax does not arise as the income from the services offered fall within the threshold. Other contentions of the petitioner are kept open.

¶8Accordingly, the petition is disposed of.

¶9I.A.No.1/2026 is allowed and the petitioner is dispensed with production of certified copy of Annexures-A, B and C on the ground that the copies of documents are produced on the basis of printout of documents uploaded in the portal. Sd/- (S SUNIL DUTT YADAV) JUDGE MCR

e -e1e-eeeee e e NC:(2026:KHC:13136 WP(No.(6142(of(2026 IN(THE(HIGH(COURT(OF(KARNATAKA(AT(BENGALURU( THDATED(THIS(THE(4 (DAY(OF(MARCH,(2026( BEFORE( THE(HON'BLE(MR.(JUSTICE(S(SUNIL(DUTT(YADAV( WRIT(PETITION(NO.(6142(OF(2026((T-RES) BETWEEN:( M/S.,MANASHRI, REPRESENTED,BY,ITS,PROPRIETOR, SHRI,MAHESH,NAGARAJ, NO.5/10,,SHREE,SHESHA,, TH18 ,CROSS,,MARGOSA,ROAD,, MALLESHWARAM,, BENGALURU,-,560,003., …PETITIONER, (BY,SRI.,PRANAY,SHARMA,Y.,ADVOCATE), AND: 1., ASSISTANT,COMMISSIONER,OF,CENTRAL,TAXES, Digitally NORTH,DIVISION-4,,,signedtiby VIJAYA0P BANGALORE,NORTH,COMMISIONERATE,, Location: RD 3 ,FLOOR,,NO.16/1,,S,P,COMPLEX,,HIGH0COURT OF LALBAGH,ROAD,,, KARNATAKA BENGALURU,-,560,027., 2., THE,COMMISSIONER,OF,CENTRAL,TAX,(APPEALS-II), TRAFFIC,TRANSIT,MANAGEMENT,CENTRE,, THBMTC,BUILDING,,4 ,FLOOR,,, ABOVE,BMTC,BUS,STAND,, DOMLUR,,OLD,AIRPORT,ROAD,, BENGALURU,-,560,071., e -e2e-eeeee e e NC:(2026:KHC:13136 WP(No.(6142(of(2026 3., THE,SUPERINTENDENT,OF,CENTRAL,TAXES, CND-4,RANGE,,NORTH,COMMISSOINERATE,, DIVISION,-,4,, NO.59,,HMT,BBHAVAN,, ST1 ,FLOOR,,BALLARY,ROAD,, GANGA,NAGAR,, BENGALURU,-,560,032., …RESPONDENTS, (BY,SRI.,ARAVIND,V.,CHAVAN.,ADVOCATE), , THIS, WP, IS, FILED, UNDER, ARTICLES, 226, AND, 227, OF, THE,CONSTITUTION,OF,INDIA,PRAYING,TO,QUASH,THE,ORDER, IN, ORIGINAL, DATED, 30/11/2022, VIDE, ORDER,,,,,,,,,,, NO.184/2022-23,ST,ND-4,PASSED,BY,RESPONDENT,NO.1,i.e.,, THE, ASSISTANT, COMMISSIONER, OF, CENTRAL, TAX, BEARING, DIN,NO.,20221157000000818368/1570,,COPY,OF,THE,ORDER, IN, ORIGINAL,DATED,30/11/2022, VIDE,ORDER, NO.184/2022- 23,ST,-,ND-4,BEARING,DIN,NO.,20221157000000818368/1570, IS,ENCLOSED,AND,MARKED,AS,ANNEXURE-A,AND,ETC., , THIS, PETITION,, COMING, ON, FOR, PRELIMINARY, HEARING,,THIS,DAY,,ORDER,WAS,MADE,THEREIN,AS,UNDER:, CORAM:, HON'BLE,MR.,JUSTICE,S,SUNIL,DUTT,YADAV ORAL ORDER The petitioner has called in question the validity of the Order-in-Original at Annexure-A, petitioner has also challenged the Order in Appeal at Annexure-B, as well as recovery notice at Annexure-C. The petitioner has challenged the Order in Original as well as the Order in Appeal on the ground that the petitioner is not liable to pay service tax as the petitioner's liability would not arise in light of the exemption threshold. 2. It is further submitted that this Court in identical circumstances wherein liability for service tax was sought to be adjudicated and demand imposed on the basis of inputs received from Central Board of Direct Taxes (CBDT) or on the basis of declaration made in the Income Tax Returns, has set aside the orders of adjudication and remitted the matter back for consideration after noticing the observations made in W.P.No.11154/2023. 3. It is submitted that this Court in W.P.No.11154/2023 at para-10 had framed certain question and if the Assessing Officer were to apply his mind and petitioner is able to demonstrate that the value of services rendered falls within the threshold of Rs.10,00,000/-, there would be no liability of the petitioner. It is further submitted that the proceedings before the adjudicating authority were ex-parte and petitioner was not provided an opportunity to place appropriate facts. 4. Perused the order dated 03.07.2024 passed in W.P.No.11154/2023. This Court while remanding the matter to the stage of reply to show-cause notice has made certain observations from para-10 onwards which reads as follows:- 10. The officers while disposing off the petitions to keep in mind the following: 1) Whether petitioners do not qualify under Section 65B(44) of the Finance Act, 1994 ? 2) Whether services are covered under negative list ? 3) Whether services are covered under the exemption list under the Notification No.25/2012-ST dated 28.06.2012 or under any other applicable Notifications? 4) Whether the person is liable to remit service tax in terms of Rule 2 (1) (d) read with applicable notification? 5) Whether claims are barred by limitation in terms of the law laid down by the Apex Court? 11. It is also clarified