Tvl.Shema And Company vs. The Government Of INDIA

Facts

The petitioner, Tvl. Shema and Company, a works contractor, filed a writ petition challenging Notification No. 6/2015-Service Tax dated 01.03.2015. The petitioner sought exemption from service tax for works contract services other than commercial nature provided to government, local bodies, and statutory authorities from 01.04.2015. Alternatively, the petitioner requested a direction to Respondents 4 and 5 (Tamil Nadu Police Housing Corporation officials) to pay the service tax, interest, and penalty demanded by Respondents 1 and 2 (Central GST authorities) for the period from 01.04.2015 to 30.06.2017. The second respondent had issued a show cause notice dated 11.03.2022.

Held

The Court dismissed the first prayer, which challenged the validity of Notification No. 6/2015-Service Tax dated 01.03.2015. Regarding the second prayer, which sought a direction for payment of service tax, interest, and penalty by Respondents 4 and 5, the Court disposed of the writ petition by following a previous order of a Division Bench dated 30.11.2022 in WP No. 24996 of 2019 etc. batch. The principle laid down in that order was that wherever show cause notices have been issued, the respective petitioners are directed to give detailed replies and participate in the adjudicatory mechanism provided under the Finance Act, 1994. The Court directed the petitioner to file replies to the show cause notice within sixty days and stated that the respondents shall pass appropriate orders on merits within ninety days after giving an adequate opportunity of being heard. No issue was expressly left undecided.

Key Issues

1. Whether the impugned Notification No. 6/2015-Service Tax dated 01.03.2015 is valid and should be quashed, and consequently, whether the petitioner is entitled to exemption from service tax on works contract services other than commercial nature provided to government, local bodies, and statutory authorities from 01.04.2015? (Question of law) 2. Whether Respondents 4 and 5 should be directed to pay the service tax, interest, and penalty demanded by Respondents 1 and 2 in respect of works contract service other than commercial nature provided to the Government of Tamilnadu from 01.04.2015 to 30.06.2017? (Question of mixed law and fact) Petitioner's arguments: The petitioner sought to quash the notification and claimed exemption. Alternatively, they sought a direction for payment by the government entities. Revenue's arguments: The judgment does not record specific arguments from the revenue or state respondents regarding the validity of the notification or the alternative prayer. However, the second respondent had issued a show cause notice.