M/S.Pradeep Kumar Makam vs. The Commissioner Of Central Tax

WP/9023/2026HC TelanganaGSTCNR HBHC01017998202630 March 2026Bench: APARESH KUMAR SINGH,G.M. MOHIUDDIN8 pages

For Petitioner: SRI M.V.S.SAI KUMARFor Respondent: sRl DoMlNlc FERNANDES, sENloR, counset for the Respondent No.3: --, STANDING couNSEL FoR cBlc

AI SummaryDismissed

Facts

The petitioner, M/s. Pradeep Kumar Makam, a contractor, challenged an order-in-original dated November 23, 2023, passed by the Commissioner of Central Tax, Hyderabad. This order confirmed a demand of Rs. 58,83,028/- towards service tax for the financial years 2016-17 and 2017-18 (up to June 2017), and imposed an equivalent penalty under Sections 77 and 78 of the Finance Act, 1994. The petitioner contended that the services provided were exempt under Notification No. 25/2012-Service Tax dated June 20, 2012, and that the order was passed without proper service and without considering this exemption. The petitioner also claimed the respondents invoked the extended period of limitation based on alleged suppression of facts, despite the petitioner's bona fide belief in the exemption. The writ petition was filed on March 23, 2026, after receiving a recovery notice from the bank.

Held

The Court dismissed the writ petition. The Court noted that the writ petition was filed more than two years after the order-in-original was passed. It observed that the petitioner had failed to avail the opportunities for personal hearing, which were sent to their registered address via speed post, despite receiving the show cause notice. The Court found that the present writ petition was filed much after the period for filing an appeal had expired. Relying on the ratio of the Apex Court's decision in Assistant Commissioner (CT) LTU, Kakinada, v. Glaxo Smith Kline Consumer Health Care Limited, the Court held that the writ petition was not maintainable due to the delay and the availability of an alternative appellate remedy. Therefore, the Court was not inclined to entertain the writ petition. No specific finding was made on the merits of the exemption claimed by the petitioner or the validity of the demand and penalty.

Key Issues

1. Whether the action of the respondents in issuing proceedings and confirming a total demand of Rs. 58,83,028/- towards service tax for the financial years 2016-17 and 2017-18, along with an equivalent penalty under Sections 77 and 78 of the Finance Act, 1994, is illegal, arbitrary, and contrary to the provisions of the Act and exemption notifications, particularly Notification No. 25/2012-Service Tax dated June 20, 2012, considering the services provided by the petitioner were exempt. Petitioner's contentions: The services provided by the petitioner were exempt as per Notification No. 25/2012-Service Tax dated June 20, 2012. The impugned order was passed without proper service and contrary to the Finance Act, 1994, without considering the available exemption. The extended period of limitation was wrongly invoked as the petitioner acted under a bona fide belief of exemption. The petitioner approached the court only after receiving a recovery notice, without proper service of the adjudication order or a reasonable opportunity to appeal. Revenue's contentions: The petitioner neither paid service tax nor filed ST-3 returns. The show cause notice was issued on April 28, 2022, for contravention of Sections 67, 68, 69, and 70 of the Finance Act, 1994, read with relevant rules. The petitioner did not respond to the show cause notice or avail opportunities for personal hearing sent to their registered address. The adjudicating officer confirmed the demand based on information from the Income Tax Department. The petitioner did not approach the appellate forum within the stipulated time, making the writ petition not maintainable, citing the decision in Assistant Commissioner (CT) LTU, Kakinada, v. Glaxo Smith Kline Consumer Health Care Limited.

Sections Cited

Section 77, Section 78, Section 73, Section 67, Section 68, Section 69, Section 70

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

rll IN THE HIGH COURT FOR THE STATE OF TE AT HYDERABAD (Special Original Jurisdiction) ir II LANGANA [ 3488 I MONDAY, THE THIRTIETH DAY OF MARCH TWO THOUSAND AND TWENry SIX PRESENT THE HONOURABLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH AND THE HONOURABLE SRI JUSTICE G.M. MOHIUDDIN WRIT PETITION NO: 9023 OF 2026 Between: M/s. Pradeep Kumar Makam, S/o. M.Thirupathaiah, Agqd aboq! 46 years, R/o. D.No.4-35, Lingal Village AND Mandal,Nagarkumool District, Telangana AND ..PETITIONER 1. The Commissioner of Central Tax, GST AND Central Excise Commissioner ate, Hyderabad. 2- The Aisistant Commissioner of Central Tax, GST AND Central Excise Division, Nagarkumool / Mahabubnagar Division. 3. The Branch -Manager, State Bank of lndia, Lingal Branch, Nagarkurnool District' Telangana ..RES''NDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be . pleased to issue an appropriate Writ, direction, or Order, more particularly one in the nature of Writ of Mandamus declaring the action of the respondents in issuing the Proceedings No.O.R.No.31l2}22-23-Adjn (ADC)-ST (DlN. 202311566YQ0OOO444ABT). Order in Original No.64/2023- 24-Adjn (ADC)-ST dated 23-11-2023 by Respondent authorities confirming total demand of RS.58,83,O281- towards Service Tax for the financial years 2016-17 and 2017-18 (up to June 20171and also imposed a penalty of RS.58,83,O281- under Sections 77 and 78 of the Finance Act, 1994 doubling the liability without considering the exemptions available for Government is itlegal, arbitrary, though the services provided by the petitioner was exempts as per the Notification No.25l2012-Service Tax, dated 20-06-2012 and passed without proper service of the order and contrary to the provisions of the Finance Act, 1994 and exemption notifications issued there under with a direction to the respondents verify the Notification ' No.25/2012.Service Tax, dated 20-06-2012 as the service'i provided by the I i,-';', .". petitionerwils exempts before taking steps to cotlect service tax demand along ', with interest and penalties for the period 2016-17 and 2017-18. lA NO: 1 OF 2026 Petitic,n under Section 151 CPC praying that in the circumstances stated in the affidavit t'iled in support of the petition, the High Court may be pleased to direct the. respondeints verify the Notification No.2 51 2012-Service Tax, dated 20-06-2012 as the services provided by the petitioner was exempts before taking stets to collect service tax demand along:with interest and penates for the period 2016-17 and 2017-18. Counsel for the Petitioner: SRI M.V.S.SAI KUMAR counsel for the Respondent Nos.1 & 2: sRl DoMlNlc FERNANDES, sENloR counset for the Respondent No.3: -- STANDING couNSEL FoR cBlc

The,Court made the following: ORDER

IN THE HTGH COURT FOR THE STATE OF TELANGANA AT TTYDERABAD THE HON'BLE THE CHIEF JUSTICE SRI APARESH KT'MAR SINGH AND THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN WRIT PETITION No.9023 of 2026 Dated: 30.03.2026 Between: tWs. Pradeep Kumar Makam Petitioner and The Commissioner of Central Tax, GST & Central Excise Commissionerate, Hyderabad, and2 others. ...Respondents ORDER: Learned counsel Sri M.V.S.Sai Kumar appears for the petitioner. Sri Dominic Femandes, leamed Senior Standing Counsel for Central Board of [ndirect Taxes and Customs (CBIC), appears for respondents No.l andZ

Tlre petitioner has assailed the order-in.original dated 23.11.2023 passed by respondent No.l confinning the demand of Rs.5g,g3,02gl_ towerds service tax for lhe financial years 2016-17 and 2017-lg (up to June 2017) and also penalty of equivalent amount under Sections 77 and 78 otthe Finance Act, 1994 (hereinafter referred to as,..the 1994 Act'), in th,: present writ.petition filed on 23.03.2026. .

Leamed counsel for the petitioner submits that the services prov ided by the petitioner, who is a contractor, are exempted under Notilication No.25l20 I 2-Service Tax, dated, 20.06.20 12. The impugned order has been passed without proper service of the adjudication order and contrary to the provisions of the 1994 Act without taking into consideration the exemption to which the petitioner is entitled under the Notilication No.25l2012-Service Tax, dated 20.06.2012. The respondents lrave invoked the extended period of limitation under Secti rn 73 of the 1994 Act on grounds of suppression of facts, though the petitioner had acted under the bona fide belief that he was not requir:ed to pay the tax being covered by the Notification No.25l2012_ Servioe Tax, dated 20.06.20 12. The petitioner has approached this court only upon issuance of recovery notice upon the petitioner's bank

3 without service of the adjudication order or providing a reasonable opportunity to file an appeal.

Learned Senior Standing Counsel for CBIC submits that from a perusal of the impugned order it appears that the petitioner had neither paid any service tax on the gross amount charged for provision of the taxable services nor filed ST-3 returns to veri$ the taxability of the income declared by the service provider in the income tax retums filed for the financial year 2O16-17. The order-in-original shows that the petitioner had not paid the service tax due on the total tumover during the said period. Therefore, the show cause notice was issued on 28.04.2022 alleging contravention of Sections 67,68, 69 and 70 of the 1994 Act read with Rules 4, 6 and 7 of the Service Tax Rules, 1994. However, the petitioner did not respond to the show cause notice nor submitred a reply nor requested to give time for submission of reply. Opportunity of personal hearing was given by the respondents vide letters dated 21.12.2022, 12.10.2023 and30.10.2023 which were sent to the petitioner's registered address by speed post. However, the petitioner did not avail the opportunity of personal hearing also. Therefore, the adjudicating officer proceeded to confirm the demand after scrutiny of the information received from the Income Tax

4 Depaftment for the relevant financiar year. It is further submitted that pursuant to introduction of Section 66D of the 1994 Act i.e., negative list o[ services, though services have been rendered by the noticee and consi,leration has been received from the service recipients for the servi<ps rendered, birt no documents/agreements, invoices etc., were provirled by the petitioner to show that services fall under the negative list or the services are exempted by the Mega Exemption notification. Learned Senior Standing Counsel for CBIC further submits that the petitioner has not approached the appellate forum by invoking the appellate remedy within the stipulated time. Therefore, the writ petition is not maintainable in view of the decision rendered in Assistant Commissioner (CT) LTU, Kakinada, v. Glaxo Smith Kline Consumer Health Care Limitedr.

We have heard the leamed counsel for the parties and taken note ofthe materials available on record.

The writ petition has been filed after more than two years of the passirtrg of the order-in-original. A perusal of the order_in_original shows that not only the show cause notice, but the opportunity of personal hearing was also given to the petitioner by sending notices to f( ' lzozo; re scc es r

5 the petitioner's registered address by speed post. But the petitioner fuiled to avail the said opportunity. The present writ petition has been filed much after the appeal period. Therefore, it is hit by the ratio of the Apex Court in the case of Glaxo Smith Kline Consumer Health Care Limited (supra). Therefore, we are not inclined to entertain the writ petition. 7 . The writ petition is accordingly dismissed. There shall be no order as to costs. Miscellaneous applications pending, ifany, shall stand closed. . S.MALLIKARJUNA RAO SISTANT REGI //TRUE CO SECTION OFFICER

One CC to SRI M.V.S.SAI KUMAR, Ad OR ANDING COUNS EL

One CC to SRI DOMINIC FERNANDES, FOR CBIC [OPUC]

Two CD Copies PSK. TKS To cI OP

HIGH COURT DATED:3010312026 ORDER WP.No.9023 of 2026 h t: 5it 1-i ,{u * 20 APn 2m z, * PATIT{ DISMISSING THE WRIT PETITION WITHOI.'T COSTS ( s\o\rt

Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.