Service Tax - RTI Information is Valid Proof that Main Contractor Discharged Service Tax Liability
MANY sub-contractors get stuck with service tax Show Cause Notices and when they take the plea that the main contractor has discharged the tax liability on the whole value, they are not able to produce proof for the same. The main contractors are usually big business houses or PSUs and don't bother to oblige the sub-contractor with proof of payment of Service Tax for the whole amount. What does the poor sub-contractor do in such cases?
RTI seems to be an option, at least as far as PSUs are concerned.
In an interesting case before the CESTAT recently, the appellant who was a sub-contractor took the plea that he was not liable to pay Service Tax as the main contractor has discharged the Service Tax liability. To establish this, the appellant furnished information received from the main contractor under RTI Act, 2005 showing that the main contractor has discharged the service tax liability on the said services.
The Revenue argued that the appellant failed to establish that service tax liability was discharged by the main contractor; that the information/reply received under RTI Act is not conclusive proof of payment of tax and cannot be accepted.
The Tribunal observed,
The information/document made available by the Public Information Officer (PIO) is something which is already recorded in the official records of the public office/authority. On receiving application, the PIO just furnishes a copy of the information contained in the records kept in proper custody. Section 3 of RTI Act states that every citizen shall have the right to information and may obtain the same by submitting an application. The information having been provided by a public officer under the provision of Right to Information Act, 2005, I do not find any reason to disbelieve the same.
The appeal was allowed.
For more details, please see Breaking News