Case Details: VCI Hospitality ltd. Versus Commissioner of Central Tax, Delhi West (2025) 30 Centax 361 (Tri.-Del)
Judiciary and Counsel Details
- Ms Binu Tamta, Member (J) & Ms Hemambika R. Priya, Member (T)
- Shri Anand Narayan, Authorised Representative, for the Respondent.
Facts of the Case
The appellant, M/s VCI Hospitality Ltd., entered into an agreement with M/s World Resort Ltd. for providing promotional activities relating to marketing and sales of Golden Palm Hotel & Spa. These activities included placing advertisements in print and electronic media, installing hoardings, and reaching customers through telephone communications. The Department issued a show cause notice proposing to demand service tax crore for the financial years 2011–12 to 2014–15 under Section 73 of the Finance Act, 1994, along with interest and penalties. The notice alleged that the services rendered were classifiable under ‘Business Auxiliary Services’.
The appellant neither filed a reply nor appeared for hearing. In appeal before the Tribunal, the appellant contended that the services provided were not taxable and that resort to best judgment assessment under Section 72 was unjustified, particularly for FY 2014–15 when financial records like the balance sheet were not furnished.
CESTAT Held
The Tribunal dismissed the appeal, holding that the promotional activities undertaken by the appellant squarely fell within the ambit of taxable ‘Business Auxiliary Services’ as defined under Section 65(105)(zzb) of the Finance Act, 1994. It was observed that such services continued to be taxable under Section 66B post-2012. The Tribunal further upheld the invocation of best judgment assessment under Section 72 for FY 2014–15, given the appellant’s failure to submit its balance sheet and other financial details.
Referring to judicial precedents, the Tribunal noted that best judgment assessment is a legally sanctioned method for estimating tax liability in the absence of complete records and was fairly exercised in this case. Consequently, the impugned order confirming demand, interest, and penalties was sustained.
List of Cases Cited
- CST v. H.M. Esufali — 1973 (90) ITR 271 (SC) — Referred [Paras 6, 14]
- Fort Health Club v. Commissioner — 2010 (17) S.T.R. 154 (Tribunal) — Relied on [Para 13]
- National Building Construction Company Limited v. Union of India — 2019 (20) G.S.T.L. 515 (Del.) — Relied on [Para 12]
- Shri Uday Veer Singh v. Commissioner — Final Order No. 70532/2024, dated 21-8-2024 by CESTAT, Allahabad — Referred [Para 8]
