Service Tax cannot be demanded primarily on basis of Form 26AS data: HC

The case revolved around a service tax demand raised primarily on the basis of Form 26AS data. The taxpayer had earlier succeeded before the Tribunal, which had set aside the demand. However, the Revenue challenged this decision, arguing that the issue required a closer examination of the actual nature of services rendered, rather than relying solely on data reflected in tax statements.

During the hearing before the Gauhati High Court, both sides agreed that instead of getting into technical objections, the matter should be decided conclusively on its merits. They requested that the Tribunal be directed to examine the underlying documents such as work orders and invoices to determine the correct tax position.

Issue Raised: Whether service tax demand based solely on Form 26AS requires fresh merits-based adjudication.

HC Decision: The Gauhati High Court set aside the earlier order of the Tribunal and remanded the matter back for a fresh decision. The Court emphasised that a proper determination of tax liability must be based on actual records like work orders, invoices, and supporting documents, rather than relying only on Form 26AS data.

It directed the Tribunal to reconsider the matter afresh after giving both parties a fair opportunity of hearing. The Court also stressed the need to bring finality to the long-pending dispute and ensure that the issue is decided on substance rather than procedural technicalities.

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