Order Date – 02 February 2023

Parties: M/s. Amirta International Institute of Hotel Management and others Vs The Principal Commissioner of CGST & Central Excise and The Director General of GST Intelligence and others.

Facts –

• The Petitioner, M/s. Amirta International Institute of Hotel Management, (Now known as ChennaisAmirta International Institute of Hotel Management) was issued with a show cause notice dated 30.08.2018 proposing to levy service tax for the period 01.01.2013 to 30.06.2017 upon the premise that the activity carried on by it amounts to service as defined under Section 65B(44) of Finance Act, 1994, as amended in 2012.
• The Petitioner, Shri A.R.Rahman, and C.R.Santhosh Narayanan were issued with a show cause notice proposing to levy service tax on permanent transfer of copyright in musical works in violation of Section 65B(44) of the Finance Act, 1994 and denies exemptions conferred through Notification No.25/2012 dated 20.06.2012 and denies the rights conferred on the petitioner under the provisions of the Copyright Act, 1957.
• The Petitioner, G.V.Prakashkumar, was issued with a show cause notice dated 09.04.2019 for the period 01.10.2013 to 30.06.2017 invoking extended period of limitation on the ground that the petitioner had suppressed various receipts and had not remitted tax in regard to the same.
• Writ Petition has been filed to quash Order in Original as the same is beyond the scope of Section 174(2) of the CGST Act, 2017; without jurisdiction; as it seeks to levy service tax on permanent transfer of copyright in musical works in violation of Section 65B(44) of the Finance Act, 1994 and denies exemptions conferred through Notification No.25/2012 and denies the rights conferred on the petitioner under the provisions of the Copyright Act, 1957.

Issue –

• Whether an officer of the DGGI had the authority in law to issue a show cause notice?

Order –

• The single bench of Hon’ble High Court observed that Indirect tax departments have, over the years, followed the practice of issuance of show cause notices by one authority with adjudication by another. The practice and procedure, both pre and post GST are consistent and involve participation of the officer of the DGGI in issuance of show cause notices.      
• Section 174(2)(c) states that repeal as per subsection (1) shall not affect any rights, privileges or obligations or liability acquired, accrued or incurred under the old Act and the proviso carves out an exception in regard to tax exemption granted as an investment against investment through 'Notification'. In such cases, such exemptions shall continue until rescinded.
• Thus, it was held that the assumption of jurisdiction by the officials of the DGGI is valid.
• Writ petitions are dismissed and are granted liberty to approach the appellate authority by way of statutory appeal.