Smt.R.G.Bharathi vs. Union Of INDIA
Original PDF →Facts
The petitioner, Smt. R.G. Bharathi, proprietor of M/s. Srujaa Constructions, filed a writ petition challenging an Order-in-Original (OIO No. 149/2024-25-Service Tax dated 05.09.2024) issued by the Assistant Commissioner of Central Tax, Respondent No. 3. The petitioner sought to quash this order, which pertained to two years, and also sought declarations that the tax levied on gross works contract receipts was incorrect, that VAT and Service Tax are mutually exclusive, and that civil work executed for the State Government is exempted. The impugned order was passed by the Assistant Commissioner of Central Tax, Respondent No. 3.
Held
The High Court held that the issue in controversy was directly and squarely covered by the judgment of a Co-ordinate Bench of the same Court in the case of M/s. Karnataka Chinmaya Seva Trust Vs. Joint Commissioner of Central Tax in WP No.11154/2023 & connected matters dated 03.07.2024. Following this precedent, the Court ordered that the impugned Order-in-Original dated 05.09.2024, passed by Respondent No. 3, be quashed. The Court also directed that the matters be relegated to the designated officers to be reconsidered from the stage of the show-cause notice. Petitioners were granted liberty to file their pleadings within a reasonable time fixed by the concerned officers. The ratio decidendi is that where a challenge is made to an Order-in-Original, and the matter is covered by a prior judgment of a Co-ordinate Bench, the Order-in-Original should be set aside and the matter remanded for reconsideration from the show-cause notice stage. The Court expressly did not decide on the merits of the petitioner's claims regarding exemptions or the nature of works contracts, but rather on the procedural aspect of reconsideration.
Key Issues
1. Whether the Order-in-Original dated 05.09.2024, issued by the Assistant Commissioner of Central Tax, is liable to be quashed. (Question of law) 2. Whether the levy of tax on gross works contract receipts for the assessment years 2016-17 and 2017-18 by the Assistant Commissioner was correct. (Question of mixed law and fact, potentially turning on the interpretation of works contract provisions) 3. Whether the VAT Act and Service Tax are mutually exclusive, and consequently, whether the Assistant Commissioner was correct in levying tax on works contracts. (Question of law, concerning the interplay of different tax legislations) 4. Whether civil work executed for the State Government is exempted under Section 102 of the Service Tax Act read with Notification No. 25/2012 ST dated 20.06.2012. (Question of law, concerning the applicability of exemptions) Petitioner's Contentions: The petitioner argued that the Assistant Commissioner was not right in levying tax on gross works contract receipts for the specified years. They also contended that VAT and Service Tax are mutually exclusive and that civil work executed for the State Government is exempted under Section 102 of the Service Tax Act read with Notification No. 25/2012 ST. Respondents' Contentions: The judgment does not record specific contentions from the respondents.
Sections Cited
Section 102
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, the petitioner seeks the following reliefs: “ A) Issue a writ of certiorari, or Writ of Certiorari quashing the impugned Order-in-Original vide order No. OIO No.149/2024-25- Service Tax dated: 05.09.2024 at Annexure-G issued by the Respondent-3 for the all the two years in so for as the petitioner is concerned. B) Issue writ of declaration or writ in the nature of declaration declaring that the Resp-3 was not right in levying the tax on the Gross works contract receipts executed by the Petitioner for the Assessment Years 2016- 17 and 2017-18 in so for as the petitioners is concern. C) Issue writ of declaration or writ in the nature of declaration declaring that the VAT Act and Service Tax are mutually exclusive. Hence the Resp-3 was not right is levying the Tax on works Contract. D) Issue writ of declaration or writ in the nature of declaration declaring that the Civil Work Executed to the NC: 2025:KHC:15380 State Government is exempted under Section 102 of Service Tax Act, R/w Notification No.25/2012 ST dated: 20.06.2012 in so for as the petitioner is concern at Annexure-F. E) Issue any other Writ or Directions deemed fit, in the facts and circumstances of the case, including the cost of the Writ Petition in the interest of justice and equity.”
Heard learned counsel for the petitioner and learned counsel for respondent Nos.1 to 3, respectively and perused the material on record.
Though several contentions have been urged by both sides in support of their respective claims, the issue in controversy between the parties is directly and squarely covered by the judgment of the Co-ordinate Bench of this Court in the case of M/s.Karnataka Chinmaya Seva Trust Vs. Joint Commissioner of Central Tax in WP No.11154/2023 & connected matters dated 03.07.2024, wherein it was held as under; "
Accordingly, the following: ORDER In light of observations made above, the writ petitions relating to challenge to show-cause notice, such matters will stand relegated to the officers to be designated in terms of the observations made in para 8 above, at the NC: 2025:KHC:15380 same stage. Accordingly, such of the petitions at Sl.No.1 to 5 in Column No.1 of the table relating to challenge to show-cause notice are disposed off. Insofar as such writ petitions as detailed in Column 2 of the table relating to challenge to Orders-in-Original, in light of the discussion made above, the Orders-in-Original stand set aside and the matters are relegated to the Officers to be designated to be reconsidered from the stage of show-cause notice. Accordingly, such of the petitions at Sl.No.1 to 35 in Column No.2 of the table relating to challenge to Orders-in-Original are disposed off. The petitioners who are now relegated before the authorities concerned are at liberty to file their pleadings within a reasonable time as may be fixed by the Officers concerned. Wherever the matters are pending in appeal in light of the arrangement that is made, petitioners to file a memo for withdrawal of appeal and accordingly, the orders-in-original in question would also receive the same treatment, i.e. be set aside as per the directions made above. Wherever demands have been made pursuant to the impugned orders, such proceedings are also set aside."
Under these circumstances, the present petition is also disposed of in terms of the aforesaid judgment of the Co-ordinate Bench of this Court. NC: 2025:KHC:15380
Accordingly, the impugned Order-in-original at Annexure-G dated 05.09.2024, passed by respondent No.3, is hereby quashed.
Ordered accordingly. (S.R.KRISHNA KUMAR) JUDGE
SV List No.: 2 Sl No.: 72
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.