The Madras High Court has dismissed a writ petition wherein the petitioner, a franchise of BSNL challenged the levy of service tax on activity of marketing and distribution of Cellular Mobile Telephone Service as a franchise of BSNL under the category ‘Business Auxiliary Services’.
The petitioner, M/s P.R.Mani Air Fridge & Electronics is a dealer in Sim Cards and Recharge coupons of Bharat Sanchar Nigam Limited (BSNL). The petitioner challenged a show cause notice dated 21.04.2009 which calls upon it to show cause why service tax not be levied for the activity of marketing and distribution of Cellular Mobile Telephone Service as a franchise of BSNL under the category ‘Business Auxiliary Services‘.
The petitioner submitted that BSNL has, collected the entirety of the service tax from the customers and has remitted the amount to the department, and hence no further liability should be mulcted upon it. According to the petitioner, the issue has been decided by the respondent authorities in various appeals and the petitioner is fully entitled to the benefit of the same.
“I accede to the request of the petitioner, particularly for the reason that the impugned document is only a show cause notice and hence it would be appropriate that the petitioner appear before the authorities, in response to the same,”the Court said.
While concluding, the Court added that “the petitioner is permitted to file its objections to the show cause notice, placing reliance on such materials including orders as it deems fit, within a period four weeks (4) from today. Upon receipt of the objections and annexures, if any, the authority will consider the same, hear the petitioner and pass orders in accordance with law within a period of four (4) weeks from date of conclusion of personal hearing. With this, this writ petition stands disposed of.”
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