M/S Ashok Kumar Mehnot vs. Chairman R H B
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The petitioners, M/s Ashok Kumar Mehnot and M/s Lakhlan And Qureshi Construction Company, filed writ petitions seeking directions for the refund of service tax deducted by the respondent, Rajasthan Housing Board. The petitioners were successful bidders for construction projects for the Board, constructing houses for Economically Weaker Section, Low-Income Group, and Middle-Income Group. The Board deducted service tax on the running bills submitted by the petitioners. The petitioners contended that service tax was not leviable on works contracts and therefore, no deduction should have been made. During the pendency of the petitions, the Goods and Services Tax Act, 2017 was introduced, ending the service tax regime. The court noted that the factual determination of whether services were exigible to service tax would impact the refund claim.
Held
The Court disposed of the writ petitions by directing the respondent, Rajasthan Housing Board, to treat the present writ petitions as representations. The respondent is mandated to decide the prayer for the refund of service tax deducted in accordance with the law. This decision is to be made after providing the petitioner with an opportunity of being heard. The Court also expressed its appreciation if the respondent endeavors to decide the issue expeditiously. The core of the decision is to remit the matter to the respondent for a proper adjudication of the refund claim, considering the introduction of the Goods and Services Tax Act, 2017 and the underlying factual determination of the exigibility of service tax on works contracts. The specific legal provisions governing service tax on works contracts were not explicitly discussed in detail, but the principle is that the respondent must now examine the claim afresh.
Key Issues
1. Whether the service tax deducted by the respondent on the running bills of the petitioner for works contracts was legally exigible, and if not, whether the petitioner is entitled to a refund? (This issue turns on the interpretation of provisions related to service tax on works contracts prior to the GST regime). Petitioner's Contention: The petitioner argued that service tax was not leviable on works contracts, and consequently, no deduction should have been made from their running bills. They sought a refund of the deducted service tax. Respondent's Contention: The judgment does not record any specific arguments made by the respondent regarding the exigibility of service tax or the refund claim. The court's direction implies that the respondent needs to examine the matter in accordance with law.
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Cause title — parties, addresses and appearances
Order 02/05/2024 AVNEESH JHINGAN, J (ORAL):-
These two petitions are being disposed of by this common order as the facts and issues involved are similar. For convenience, the facts are being taken up from D.B. Civil Writ Petition No. 16631/2017. [2024:RJ-JP:20689-DB] (2 of 2) [CW-16631/2017]
This petition is filed seeking directions to the respondent to refund the service tax deducted on the running bills of the petitioner.
The brief facts are that the petitioner was successful bidder in a tender issued by the Rajasthan Housing Board (for short ‘Board’). In pursuance to the tender, the petitioner constructed houses of category of Economically Weaker Section, Low-Income Group and Middle-Income Group for the Board. While clearing the running bills, service tax was deducted by the Board. The case set up by the petitioner is that on works contract no service tax was leviable and no deduction was to be made from bills.
During pendency of the petition, Goods and Services Tax Act, 2017 was introduced thereby bringing an end to service tax era. Inter alia, the factual issues with regard to as to whether services provided by the petitioner were exigible to service tax would have ramification for the prayer made.
In view of the above circumstances, these petitions are disposed of with the direction that the respondent shall consider the present writs as representations and decide the prayer for refund of the service tax deducted in accordance with law, after providing an opportunity of hearing to the petitioner.
It would be appreciated if the respondent makes a sincere endeavor to decide the issue as expeditiously as possible.
The petitions are disposed of accordingly. (BHUWAN GOYAL),J (AVNEESH JHINGAN),J Simple Kumawat /28-29 Whether Reportable: No
Reproduced from the public record of the Rajasthan High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.