On Friday, a Division Bench of the Madras High Court issued notice to be served to the Directorate General of Goods and Services Tax (GST) Intelligence following a writ appeal filed by music composer G.V. Prakash Kumar.
The department, seeking to impose a service tax on the transfer of copyright in musical works for the period between 2013 and 2017 . The composers argued that they were exempt from this tax due to their receipt from temporary transfer or use of copyright, as stated in clause (15) of Notification No. 25 of 2012.
The notice was issued to Mr. Kumar for the period between 2013 and 2017, during which he had allegedly suppressed various receipts. Additionally, they claimed that they were exempt as a service under Section 65B(44) of the Finance Act 1994.
The petitioner had further argued that the power of the DGGI to issue the notice was legally invalid as the notifications granting this power were not explicitly saved with the implementation of the GST. The petitioners also questioned the authority of the Director General of GST Intelligence to issue a show cause notice under the Finance Act 1994 and under the Section 174(2) of the Central Goods and Services Tax Act.
The case was heard by Justice Anita Sumanth, who recognized that a thorough review of the agreements between the composers and third parties was required to resolve the dispute.
The Single Bench concluded in M/s Amirta International Institute of Hotel Management vs The Principal Commissioner of CGST– 2023 TAXSCAN (HC) 269 that this examination was better suited to the authority rather than the writ court, which could not interpret the contractual clauses.
On February 2, the single judge bench had dismissed Mr. Kumar’s writ petition along with similar writ petitions filed by two other music composers, A.R. Rahman and C.R. Santhosh Narayanan. The judge had permitted Mr. Rahman and Mr. Narayanan to file statutory appeals against the tax demand raised by the GST authorities.
The appeal sought to overturn the single judge’s decision to reject Mr. Kumar’s plea to quash the show cause notice issued against him in the service tax matter.
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