Arun Kumar vs. The Managing Director, Bihar State Power Transmission Company LTD. And Ors

Held

The Court held that it could not issue any directions to the Central Excise Department without the petitioner first raising a formal claim before them. While the petitioner argued that Circular No. 80/10/2004 S.T. exempted him from service tax, and BSPTCL cited a notification dated 20.06.2012 for its deductions, the primary procedural hurdle was the petitioner's failure to approach the concerned tax authority. The Court acknowledged that the deducted amount had been deposited with the Central Excise and Service Tax Department. Therefore, the Court granted liberty to the petitioner to raise his claim before the Commissioner, Central Excise and Service Tax Department (Respondent No. 7). The Court directed that upon such a claim being filed with supporting documents, the Commissioner or the competent authority would consider and dispose of the grievance in accordance with the law, passing a speaking order after affording an opportunity of hearing to the petitioner, expeditiously and preferably within three months.

Facts

The petitioner, Arun Kumar, a civil contractor, was engaged by Bihar State Power Transmission Company Ltd. (BSPTCL) for the erection of a boundary wall. BSPTCL deducted Rs. 3,24,238/- from the petitioner's dues, treating it as service tax, and deposited this amount with the Commissioner, Central Excise and Service Tax. The petitioner contended that, based on Circular No. 80/10/2004 S.T. dated 17.09.2004, he was not liable for service tax, and the deduction was wrongful. BSPTCL stated that the deduction was made in accordance with a notification dated 20.06.2012. The petitioner had raised a claim with BSPTCL but not with the Central Excise Department, despite knowing the amount was deposited as service tax. The Court noted that no instructions were forthcoming from the Central Excise Department despite a significant time lapse.

Key Issues

1. Whether the deduction of Rs. 3,24,238/- by BSPTCL as service tax from the petitioner's dues was wrongful, considering the stipulations in Circular No. 80/10/2004 S.T. dated 17.09.2004? The petitioner argued that this circular exempted him from service tax liability. The revenue/State (Central Excise Department) did not explicitly argue against this point, but BSPTCL contended that the deduction was made based on a notification dated 20.06.2012. 2. Whether the Court could issue directions to the Central Excise Department in the absence of a formal claim being raised by the petitioner before that authority? The petitioner sought relief from the Court. The Central Excise Department, despite being directed to seek instructions, did not provide them.