Thirteen banks, which include several nationalized and private banks, have moved the Delhi High Court against a Service Tax demand of Rs. 38,000 crore..These banks include the State Bank of India, Punjab National Bank, Yes Bank, HDFC, The Hong Kong and Shanghai Bank among others..While issuing notice to the Central Government, the Central Board of Indirect Taxes and Customs, the Goods and Services Tax Council, and other authorities, a Division Bench of Justices S Muralidhar and Talwant Singh has directed that no final orders of adjudication would be passed in the proceedings initiated pursuant to the show cause notices/tax demand against the banks, till the next date of hearing..However, the proceedings pursuant to the notices shall continue in accordance with law, the Court clarified..The Service Tax demand was raised on April 20, 2018..The Service Tax was levied on customers savings and current accounts with a requirement to maintain Minimum Average Balance (MAB) or Average Monthly Balance (AMB) or Average Quarterly Balance (AQB)..It is the petitioners’ case that the Tax Authority has assumed non-taxable transaction as taxable and imposed Service tax on them along with a penalty..In their petition before the Court, the banks have claimed that the assessment has rocked the entire banking industry in the country and would cripple many banks which would ultimately affect millions of account holders..It has thus claimed that the proceedings initiated to recover the tax are ex-facie violative of Article 19(1)(g) of the Constitution of India as it interferes with the right of the Petitioner Banks to carry on trade and business..It is further added that the tax demand is violative of Article 265 of the Constitution of India and the Finance Act, 1994..The petitioners have also challenged the Constitutionality of Section 66E(e) of the Finance Act and corresponding Section 7(1A) read with Clause 5(e) of Schedule II to the CGST Act..These sections stipulate that the activity of ‘agreeing to the obligation to do an act’ constitutes a ‘service’ /or supply of service..The matter would be heard next on November 14..The petitioners were represented by Senior Advocate N Venkataraman with advocates Sudipta Bhattacharjee, Shashank Shekhar, Onkar Sharma, Harsh Makhija and Arjyadeep Roy from Advaita Legal..Tax Authorities were represented by Senior Standing Counsels Satish Aggarwala, Amit Bansal with advocate Vineet. .[Read Order]
Thirteen banks, which include several nationalized and private banks, have moved the Delhi High Court against a Service Tax demand of Rs. 38,000 crore..These banks include the State Bank of India, Punjab National Bank, Yes Bank, HDFC, The Hong Kong and Shanghai Bank among others..While issuing notice to the Central Government, the Central Board of Indirect Taxes and Customs, the Goods and Services Tax Council, and other authorities, a Division Bench of Justices S Muralidhar and Talwant Singh has directed that no final orders of adjudication would be passed in the proceedings initiated pursuant to the show cause notices/tax demand against the banks, till the next date of hearing..However, the proceedings pursuant to the notices shall continue in accordance with law, the Court clarified..The Service Tax demand was raised on April 20, 2018..The Service Tax was levied on customers savings and current accounts with a requirement to maintain Minimum Average Balance (MAB) or Average Monthly Balance (AMB) or Average Quarterly Balance (AQB)..It is the petitioners’ case that the Tax Authority has assumed non-taxable transaction as taxable and imposed Service tax on them along with a penalty..In their petition before the Court, the banks have claimed that the assessment has rocked the entire banking industry in the country and would cripple many banks which would ultimately affect millions of account holders..It has thus claimed that the proceedings initiated to recover the tax are ex-facie violative of Article 19(1)(g) of the Constitution of India as it interferes with the right of the Petitioner Banks to carry on trade and business..It is further added that the tax demand is violative of Article 265 of the Constitution of India and the Finance Act, 1994..The petitioners have also challenged the Constitutionality of Section 66E(e) of the Finance Act and corresponding Section 7(1A) read with Clause 5(e) of Schedule II to the CGST Act..These sections stipulate that the activity of ‘agreeing to the obligation to do an act’ constitutes a ‘service’ /or supply of service..The matter would be heard next on November 14..The petitioners were represented by Senior Advocate N Venkataraman with advocates Sudipta Bhattacharjee, Shashank Shekhar, Onkar Sharma, Harsh Makhija and Arjyadeep Roy from Advaita Legal..Tax Authorities were represented by Senior Standing Counsels Satish Aggarwala, Amit Bansal with advocate Vineet. .[Read Order]
