Publication of names – all these days - illegal?
As per the new Rules, it is only the government which has the power to publish the names and that too after the adjudication and the appeal period. Commissioners have a tendency of publishing the names of alleged evaders even before the Show cause Notice is issued.
The following are some extracts picked up from the website of Delhi Service Tax Commissionerate.
++ The major demands issued by the Commissionerate includes an amount of service tax demanded are Ms Raj Furniture for Rs. 6.8 crores , Cherry Hills Interiors for Rs. 5.2 crores , AGV Alfabs for Rs . 2.11 crores , Vistar Constructions for Rs. 4.8 crores , Nirman Construction for Rs. 1.06 crores , Sharma Construction for Rs. 2 crores , Samiah International Builders for Rs. 3.10 crores and G. D. Builders for Rs. 6.50 crores .
++ The Commissionerate of Service tax, Delhi issued a Show Cause Notice to Delhi Gymkhana Club for non payment of Service tax amounting to Rs. 2.92 Crores in respect of taxable services of Club and Associations. These services were brought into service tax net with effect from 16.06.2005. However Gymkhana club did not pay any service tax on the services provided by them to their members. The Gymkhana club has so far deposited only part of the demand i.e. Rs. 1.93 Crores towards service tax under protest and has not filed any service tax return so far.
++ The tax evasion of many other reputed clubs and associations are under investigation by the Service Tax Commissionerate Delhi. The demands against them are likely to be issued soon.
++ After completion of investigations, the Service tax Commissionerate, Delhi has issued Shaw Cause Notice to M/s Oxigen Private Limited (earlier known as M/s Prepaid India Private Limited, New Delhi) for the recovery of service tax amounting to Rs. 1.75 crores .
++DTC booked for Service Tax evasion amounting to Rs 3 Crores and 73 Lakhs: The Commissionerate of Service tax, Delhi has issued Show Cause Notice to Delhi Transport Corporation ( DTC ) for non payment of service tax amounting to Rs. 3.73 crores in respect of taxable services of “Sale of Space for Advertisement” brought into tax net with effect from 1.5.2006.
++ Consequent to investigation, Lufthansa German Airlines deposited Rs. 5.42 on account of service tax liability on services of transport of passengers by air (in class other than economy). They are collecting fare from passengers under various head such as basic fare, YQ charges, YR charges etc. and were paying tax only on basic fare. Admitting there (sic – should be their) liability, now, they have deposited service tax due on YQ and YR Charges.
Obviously, the Commissioner had no power to publish the names of the alleged offenders. It's only now that the power has been given and that too to the government and that too after the adjudication and appeal.
DDT 266 – 21.12.2005 had written,
Mr. KP Singh DGST , is fond of dropping names of big corporates who owe him Service Tax. For an unduly long period the DG has been silent which he broke in Jaipur recently. His list of evaders include Airtel , Samsung, Sterlite , DCM Sriram , Reliance, Indian Airlines, ONGC and the Rajasthan Cricket Association. He further enlightened newsmen that leading corporates as well as state government and Central PSUs have evaded paying service tax and the department is communicating with them for recovery of the same. He adds that Sterlite Corporation owed about Rs 1.3 crore , Samcor Ltd, a Samsung Corporation subsidiary, has evaded service tax to the tune of Rs 35 lakh , Kota based Mangalam Cement Ltd has been booked for tax evasion of Rs 36.66 lakh and DCM Sriram is involved in a case for a claim of Rs 20.60 lakh . Indian Airlines owed him over Rs 100 crore against service tax and Hindustan Aeronautics Limited owes Rs 60 crore . He did not want to humiliate Reliance, Airtel and other corporates as they are sources of income for the government. Do you have laws to collect taxes or do you go to the press? What is the impression that the DG is trying to convey? When ONGC , RBI , Reliance, Indian Airlines and other such big names do not pay taxes why should small time barbers and photographers pay tax? Is that the message? Or is it that the big ones will any way get away but you small fry cannot?
In CIRCULAR NO. ., Dated: April 19, 2007 , Board had clarified that
“ these provisions are stringent in nature and may affect the reputation of a person. Therefore, these should be used sparingly, with due care and caution. At the same time, it has also to be ensured that in deserving cases, they are, in fact used, and that there is no arbitrary selection in their implementation.”
Speaking in the Lok Sabha on 20.8.2004, the Honourable Finance Minister said,
I think , one must be careful before branding somebody finally as a tax evader. There is a hierarchy of Tribunals and Courts and only when the last forum is exhausted, we come to a final conclusion; one can say that there is a final evasion of tax.
When TIOL was invited to Parliament to speak to the Standing Committee on Finance, I submitted to the Hon'ble MPs that a mere Show cause Notice does not make any one an offender and there should be some punishment for the officer who illegally and arbitrarily publishes the names of innocent persons as offenders – maybe the names of offending officers should also be published. There was an interesting discussion on this aspect in the Committee.
Also Have a look at our article Lethal Libel