Subodh Kumar vs. The Union Of INDIA Through The Secretary

CWJC/11636/2024HC PatnaGSTCNR BRHC01070287202405 August 2024Bench: MR. JUSTICE NANI TAGIA,THE CHIEF JUSTICE-3 pages

AI SummaryDismissed

Facts

The petitioner, Subodh Kumar, is challenging an order passed under the Finance Act, 1994, for the financial year 2015-16. A show-cause notice was issued on January 22, 2021. The petitioner contends that the contracts undertaken during this period were government contracts, which were exempt from the purview of the Finance Act, 1994. The petitioner also asserts that the show-cause notice, issued on January 22, 2021, falls within the five-year limitation period prescribed under Section 73(1) of the Finance Act, 1994, considering the due dates for filing returns were October 25, 2015, and April 25, 2016. The petitioner acknowledges an alternate remedy of appeal.

Held

The Court held that the question of exemption is a mixed question of law and fact, requiring an assessment of the specific contracts undertaken by the petitioner and the relevant exemption notifications. Given the existence of an efficacious alternate remedy by way of an appeal under the Finance Act, 1994, the Court declined to exercise its discretionary writ jurisdiction under Article 226. The Court explicitly stated that there was no observation on the merits of the case. The writ petition was dismissed solely on the ground of the availability of an alternate remedy. The Court did not decide on the validity of the show-cause notice or the exemption claim itself.

Key Issues

1. Whether the petitioner's government contracts during the period 2015-16 were exempt from the purview of the Finance Act, 1994, thereby rendering the show-cause notice and subsequent order invalid? (Mixed question of law and fact, turning on the interpretation of exemption notifications and the nature of contracts undertaken). Petitioner's Arguments: The petitioner argues that the contracts performed were government contracts and thus exempt under the Finance Act, 1994. They also implicitly argue that the issuance of the show-cause notice was within the prescribed limitation period. Revenue's Arguments: The revenue did not explicitly present arguments on the merits of the exemption claim. Their primary contention, as reflected in the court's decision, is the availability of an efficacious alternate remedy.

Sections Cited

Section 73(1), Section 7

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.11636 of 2024 ====================================================== Subodh Kumar Son of Akhileshwar Lal Das Resident of Village- Betauna, Benipatti, Police Station- Benipatti, District- Madhubani. ... ... Petitioner/s Versus 1. The Union of India through the Secretary, Ministry of Finance, Government of India, New Delhi. 2. The Chairman, Central Board of Indirect Taxes and Custom, Government of India, New Delhi. 3. The Chief Commissioner, Custom, Central Excise and Service Tax (Now Central Goods and Service Tax), Central Revenue Building (Annexe), Birchand Patel Path, Patna. 4. The Assistant Commissioner, CGST and Central Excise, CCO, Ranchi Zone, Central Revenue Building (Annexe), Birchand Patel Path, Patna. 5. The Assistant Commissioner, CGST and CX Division, Darbhanga. 6. The Superintendent CGST, Madhubani Range, Madhubani. 7. The Chief Engineer, Bihar State Education Infrastructure Development Corporation Limited, Patna. 8. The Principal Secretary, Planning and Development Department, Government of Bihar, Patna. 9. The Executive Engineer, Local Area Engineering Organization, Works Division-1, Madhubani. 10. The Engineer in Chief, Building Construction Department, Government of Bihar, Patna. 11. The Executive Engineer, Building Construction Department, Madhubani. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr. Narendra Kumar, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST & CX Mr. Devansh Shankar Singh, Advocate, Patna High Court CWJC No.11636 of 2024 dt.05-08-2024 2/3 Mr. Harsh Anil Singh, Advocate Mr. Prabhat Kumar Singh, Advocate ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE NANI TAGIA

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 05-08-2024 The petitioner is aggrieved with Annexure-4 order passed under the Finance Act, 1994 for the year 2015-16. The show-cause notice for the said year was issued on 22.01.2021 and the limitation on grounds ‘inter-alia’ of suppression of facts leading to evasion, is 5 years under Section 73 (1). The show- cause notice issued on 22.01.2021 is within the 5 year period from the due date of filing returns, which is 25.10.2015 and 25.04.2016, for the two half yearly returns as per Section 7 of the Service Tax Rules, 1994. 2. The petitioner’s contention is that the petitioner is a person who has done only government contracts in the period which is exempted from the purview of the Finance Act, 1994. The petitioner has a remedy by way of an appeal under the Finance Act, 1994. The question of exemption is a mixed question of law and fact; the exemption flowing from a notification issued by the Central Government and the facts to be ascertained, being the exact contracts which were carried out by the assessee. In such circumstances, it is only proper that the Patna High Court CWJC No.11636 of 2024 dt.05-08-2024 3/3 assessee shall approach the appellate authority, which liberty is conceded with just exceptions.

There is no observation on merits and the writ petition would stand dismissed only on refusing to exercise the discretion under Article 226 in such matters, where an efficacious alternate remedy is available.

sharun/- (K. Vinod Chandran, CJ) ( Nani Tagia, J) AFR/NAFR CAV DATE Uploading Date 08.08.2024. Transmission Date

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