Uppari Krishna Murthy vs. Union Of INDIA

Facts

The petitioner, Uppari Krishna Murthy, challenged an order dated March 28, 2023, passed by the Commissioner of Indirect Taxes and Customs, Hyderabad Audit-I Commissionerate (Respondent No. 4). This order confirmed a demand of Rs. 2,10,20,610/- towards Service Tax for the financial year 2016-17. The petitioner argued that he is a contractor for the Telangana Government, and the services rendered by him are exempt from service tax under Notification No. 13/87-Service Tax dated June 26, 1987, and Notification No. 25/2012-Service Tax dated June 20, 2012. He also relied on Circular No. 116/16/2011-Service Tax. The respondent argued that the petitioner failed to produce original documents to support his claim of non-taxability, only submitting photocopies.

Held

The High Court held that since the petitioner's claim of exemption goes to the root of the matter, one more opportunity should be granted to him to substantiate his claim. The Court noted that the original documents pertaining to tenders and work orders are with the Government, and the petitioner could only produce photocopies. Therefore, the impugned order dated March 28, 2023, was set aside, and the proceedings were remanded to Respondent No. 4. The petitioner is to submit certified or notarised copies of the relevant documents to Respondent No. 4. Respondent No. 4 is directed to examine these documents in light of the circulars relied upon by the petitioner, provide an opportunity of hearing, and pass an appropriate order within twelve weeks from the receipt of this order. The Court expressly left undecided the ultimate taxability of the services.

Key Issues

1. Whether the services rendered by the petitioner, a contractor for the Telangana Government, are exempt from Service Tax under Notification No. 13/87-Service Tax and Notification No. 25/2012-Service Tax, and Circular No. 116/16/2011-Service Tax, as contended by the petitioner? Petitioner's arguments: The petitioner contends that the services provided by him to the Telangana Government are covered by the exemption notifications and circulars cited, and the impugned order overlooked these provisions. He claims to have submitted photocopies of relevant tender and work order documents, which are originally with the government. Revenue's arguments: The revenue, through Respondent No. 4, argued that the petitioner failed to produce original documents to substantiate his claim of non-taxability. In the absence of proper evidence, the additions proposed in the show cause notice were upheld.