Order Date: 8 August 2022

Facts-

• The Appellant, Raj Mohan is providing taxable services under the category ‘manpower supply’. 
• The audit of the appellant was conducted and found differences in the figures reflected in ST-3 returns and form 26AS filed under Income Tax Act, 1961 and it was noticed that the appellant received excess income in 26AS as comparison to income shown in ST-3 returns.
• A show cause notice after invoking the extended of limitation was issued demanding Service tax along with applicable interest and penalty for the short payment of Service tax. The aforesaid demand was confirmed by the Adjudicating Authority vide Order-in-Original along with interest and penalty.
• Being aggrieved the appellant filed this appeal.

Issue-

• Whether the demand of Service tax along with interest and penalty is sustainable?

Order-

• The Tribunal observed that so far as the issue about differences in the figures reflected in ST-3 Returns and in form 26AS is concerned it has been settled by way of various decisions of the Tribunal that the Revenue cannot raise the demand on the basis of merely differences without establishing that the entire amount received by the appellant as reflected in form 26AS is consideration for services provided because it is also not proper to presume that the entire differential amount was on account of consideration for providing services without verifying it.
• The burden to prove the allegations is upon the department that the appellants have received the extra payment on which the TDS has been deducted by the service recipient.
• The Tribunal relied on the decision of the Tribunal in the matter of Qwest Engineering Consultant Pvt. Ltd. v/s Commissioner CGST, Central Ex. Allahabad; 2022 (58) GSTL-345 (Tri-All.)in which the coordinate Bench of the Tribunal has held that form 26AS is not a statutory document for determining the taxable turnover under the Service tax as form 26AS is maintained on cash/receipt basis by the Income Tax department for the purpose of TDS etc. whereas the Service Tax is chargeable on mercantile basis  on the services provided.
• Therefore the appeal is partly allowed.