M/S Kamla Construction And Co And Swastik Enterprises (Jv) Through Its Partner Roushan Singh vs. Principal Commissioner Central Goods And Service Tax And Central Excise

Held

The Court held that the impugned order dated 27.03.2023, passed by the Principal Commissioner, CGST and Central Excise, Ranchi, imposing a penalty of Rs. 9,01,75,166/-, cannot be sustained as it was passed in gross violation of the basic principles of natural justice and fair play. The Court found merit in the writ application after perusing the dispatch register produced by the respondents, which confirmed that the petitioner was not served with the show-cause notice dated 29th September 2020, nor any other notice enabling them to file a reply and supporting documents. Consequently, the Court quashed and set aside the order dated 27.03.2023 and any consequential orders. The matter was remitted back to the Adjudicating Authority to decide the case afresh, with directions for the parties to appear on 11th September 2025 and for the Adjudicating Authority to decide the case expeditiously, and in any event, by 31st December 2025. The issue regarding the exemption under Notification No. 25/2012-ST and the mutually exclusive nature of VAT and Service Tax was not expressly decided due to the procedural defect.

Facts

The petitioner, M/s. Kamla Construction & Co. and Swastik Enterprise (JV), filed a writ petition challenging an ex-parte Order-in-Original No. 07/ST/Pr.Commr./2023 dated 27/29.03.2023, passed by the Principal Commissioner, Central Goods and Services Tax, Ranchi. The petitioner contended that the order was passed in violation of principles of natural justice as no show-cause notice dated 29.09.2020, nor any subsequent notices for personal hearing, were served upon them. Furthermore, the petitioner argued that no service tax was payable for the financial years 2014-15 and 2015-16 on road construction work for the State of Jharkhand, as it was exempted under Sl. No. 13 of Notification No. 25/2012-ST dated 20.06.2012. They also highlighted that VAT was paid on the entire turnover and TDS was deducted by the principal employer, asserting the mutually exclusive nature of VAT and Service Tax. The disputed amount is Rs. 9,01,75,166/-.

Key Issues

1. Whether the ex-parte Order-in-Original No. 07/ST/Pr.Commr./2023 dated 27/29.03.2023, passed by the Principal Commissioner, Central Goods and Services Tax, Ranchi, is liable to be quashed for violation of the principles of natural justice, specifically regarding the non-service of the show-cause notice dated 29.09.2020 and subsequent notices for personal hearing upon the petitioner? 2. Whether the petitioner is liable to pay service tax for the financial years 2014-15 and 2015-16 on the work executed for the Road Construction Department of the State of Jharkhand, considering the exemption under Sl. No. 13 of Notification No. 25/2012-ST dated 20.06.2012, and the fact that VAT was paid on the entire turnover and TDS was deducted by the principal employer? Petitioner's Arguments: The petitioner argued that the impugned order is without jurisdiction due to the non-service of the show-cause notice and subsequent notices for personal hearing. They also contended that no service tax is payable as the work executed is exempted under Notification No. 25/2012-ST and that VAT and Service Tax are mutually exclusive. They relied on the principle that VAT and Service Tax are mutually exclusive. Respondent's Arguments: The judgment does not record any specific arguments made by the respondent.