Madras High Court Case: Validity of Customs Act Attachment Order for Service Tax Dues

editor — Thu, 04 Jul 2024 06:59:53 +0000

Introduction:

In the case of Zest Buildtek Promotors v. Deputy Commissioner of GST and Central Excise [W.P. No. 12349 of 2023 dated February 19, 2024], the Hon’ble Madras High Court addressed the validity of an attachment order issued under the Customs Act for recovery of Service Tax dues.

Facts of the case:

Zest Buildtek Promotors (“the Petitioner”) filed a writ petition challenging an attachment order dated February 16, 2023 (“the Impugned Order”) issued by the Revenue department (“the Respondents”). The order aimed to recover service tax dues under the Customs Act, prompting the Petitioner to seek its annulment and requested a certified copy of the Impugned Order.

Issue:

Whether the issuance of an attachment order under the Customs Act for recovery of Service Tax dues is valid?

Held:

The Hon’ble Madras High Court in W.P. No. 12349 of 2023 held as follows:

Observed that as per Section 65B(37) of the Finance Act, 1994, a partnership firm qualifies as a "person" for service tax purposes and thus has standing to file a writ petition.
Further observed that the Impugned Order was issued under Section 142(1)(c)(ii) of the Customs Act, 1962, despite the repeal of relevant provisions in the Finance Act.
Noted that Section 174 of the CGST Act empowers the Respondents to recover tax under Section 142(8)(a) of the CGST Act.
Further noted that Section 142(1) of the Customs Act permits invoking provisions only for unpaid dues under the Customs Act.
Opined that the Respondents are empowered to recover Service Tax dues under Section 142 of the CGST Act.
Held that the Impugned Order was quashed and set aside.
Opined that the Respondents are empowered to recover Service Tax dues under Section 142 of the CGST Act.
Directed that the Petitioner is entitled to file a statutory appeal despite the limitation period, given the non-availability of the Impugned Order.

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Madras High Court Case: Validity of Customs Act Attachment Order for Service Tax Dues

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