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| Insurance Company challenges notice on levying Service Tax | | HC stays proceedings pending before Commissioner Sales Tax | | Early Times Report
Jammu, Oct 10-Jammu and Kashmir High Court today stayed the proceedings pending before the Commissioner Sales Tax and issued notice to the Commissioner/Secretary to Government Finance Department, Commissioner Sales Tax and Commercial Sales Tax Officer Circle-1 Railhead Complex Jammu returnable within six weeks.
This direction was passed in a petition filed by Max Insurance Company challenging the notice issued by Commissioner Sales Tax notifying that the insurance service provided to the policy holders by any person or insurer is liable to pay tax @ 8% plus surcharge @ 5% on the amount of premium collected by the Insurance Company.
Justice Mansoor Ahmed Mir, after hearing Advocate Aditya Gupta appearing for the Insurance Company, ordered that subject to objections from other side and till next date, the proceedings pending before Commissioner Sales Tax shall remain stayed.
In the petition it has been submitted that assessing authority issued a notice on May 22, 2007 informing the petitioner that the Insurance services are taxable as per notification issued by the J&K Govt. Vide SRO 117 March 30, 2007 and ACCT/106 dated April 21, 2007 and called upon the petitioner to get itself registered under the J&K General Sales Tax Act 1962. On this the assessing authority further issued notice on May 19, 2009 directing the petitioner to furnish security deposit of an amount of Rs 80,000 for the purpose of registration as “dealer” under the provisions of J&K General Sales Tax Act. On the receipt of the said notice, the petitioner examined the provisions of J&K General Sales Tax Act 1962 and found that under section 6 of the said Act only such person is required to be registered as a dealer who is liable to pay tax under the said provision and also carries on business which is taxable.
During the course of arguments Advocate Aditya Gupta submitted that the petitioner is not dealer with the meaning of J&K GST and therefore is not and cannot be held to be a dealer as defined under the said Act. Since the petitioner is not engaged in the business of dealing in goods, the Advocate prayed for issuance of direction and quashing the show cause notice and assessment order issued by the Assessing Authority.
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