Subramanian Chandran vs. The Assistant Commissioner Of GST And Central Excise

Facts

The appellant, Subramanian Chandran Contractor, filed a writ appeal challenging the order of the Writ Court dated 17.04.2024, which disposed of his writ petition. The appellant had challenged an order-in-original dated 08.09.2022 passed by the Assistant Commissioner of Central GST & Central Excise, imposing service tax on services rendered to the Commissioner, Chinnamanur Municipality. The appellant contended that he was not given an opportunity of being heard, the mega exemption notification dated 20.06.2012 was not considered, and the service tax component was not included in the tender conditions, making it impossible for him to recover the tax from the municipality.

Held

The Court held that the Writ Court's decision was justified. It relied on the Division Bench judgment in M/s. Raju Construction vs. The Government of India, confirmed by the Supreme Court, which established that a contractor can pay service tax and recover it from the employer, even if not explicitly in the tender. The Court also noted the Writ Court's observation that Section 64(A) of the Sales of Goods Act, 1930, could be invoked for recovery. Furthermore, the Court found that since the impugned order was an order-in-original, a statutory appeal was available. The appellant could raise all his grounds, including the non-consideration of exemption notifications, before the appellate authority. Therefore, the Court dismissed the writ appeal but granted liberty to the appellant to file an appeal before the appellate authority within two weeks, which would be considered on merits.

Key Issues

1. Whether the Writ Court erred in dismissing the writ petition without considering the appellant's contentions regarding lack of opportunity, non-consideration of the mega exemption notification dated 20.06.2012, and the inability to recover service tax from the employer (4th respondent) due to its absence in tender conditions? (Mixed question of law and fact, turning on principles of natural justice, statutory interpretation, and contract law). Petitioner's arguments: The appellant argued that he was denied a proper opportunity to be heard before the order-in-original was passed. He also contended that the mega exemption notification was not taken into account and that since service tax was not part of the tender, he could not recover it from the municipality, making payment to the revenue impossible for him. Revenue's arguments: The revenue argued that even if service tax is not in the tender, a contractor can pay it and recover it from the employer, citing the Division Bench judgment in M/s. Raju Construction vs. The Government of India, which was confirmed by the Supreme Court. The revenue also argued that the writ petition was not maintainable as an alternative statutory appeal remedy was available against the order-in-original.