Shri Keshab Purkayastha vs. The Union Of INDIA And Ors.

Held

The Court held that the impugned orders dated 25.03.2022 and 16.11.2022 were liable to be set aside and quashed. The Court found that Respondent No. 3 acted without jurisdiction in issuing the order dated 16.11.2022, as the contractual job executed by the petitioner during FY 2016-17 was under N.F. Railways within the State of Assam and under the territorial jurisdiction of Respondent No. 2. There was nothing to suggest work was executed within Tripura, the jurisdiction of Respondent No. 3. The Court also noted that the demand was non-speaking and failed to deal with the exemption clauses and the notification. The Court reasoned that since Respondent No. 2 had conclusively decided that the services rendered were exempted under Clause 14(a) of Mega Exemption Notification No. 25/2012, Respondent No. 3 could not re-adjudicate the same matter. The Court directed the respondents to consider the petitioner's explanation in light of the exemption notification and pass a speaking order after granting an opportunity of personal hearing. No adverse action was to be initiated until a decision was taken. The issue of Respondent No. 5's jurisdiction was implicitly addressed by the overall quashing of its order and the focus on the exemption granted by Respondent No. 2.

Facts

The petitioner, Shri Keshab Purkayastha, executed contractual works for N.F. Railways in Assam during FY 2016-2017. The Principal Commissioner, Central GST and Central Excise, Guwahati (Respondent No. 2) determined that the petitioner was exempted from service tax amounting to Rs. 2,70,27,400.50/- under Clause 14(a) of Mega Exemption Notification No. 25/2012, issuing an order on 21.09.2022. However, the Commissioner, CGST & Central Excise, Agartala (Respondent No. 3) subsequently raised a demand for the same amount. The petitioner brought the Guwahati order to Respondent No. 3's attention, but Respondent No. 3 issued an order dated 16.11.2022. Earlier, Respondent No. 5 had issued a summons dated 07.03.2022 and an order dated 25.03.2022 demanding Rs. 2,35,02,088/- for service tax, interest, and penalty. The petitioner contends that Respondent No. 5 lacked jurisdiction as the work was in Assam, not Tripura.

Key Issues

1. Whether Respondent No. 5 had the jurisdiction to issue a summons dated 07.03.2022 and an order dated 25.03.2022 demanding service tax, interest, and penalty from the petitioner, considering the contractual works were executed in Assam and not Tripura. 2. Whether Respondent No. 3 had the jurisdiction to issue an order dated 16.11.2022 demanding service tax of Rs. 2,70,27,400.50/-, despite Respondent No. 2 having already granted an exemption for the same amount and period based on Mega Exemption Notification No. 25/2012. 3. Whether the orders dated 25.03.2022 (by Respondent No. 5) and 16.11.2022 (by Respondent No. 3) are illegal, arbitrary, and perverse for failing to consider the exemption granted under Clause 14(a) of Mega Exemption Notification No. 25/2012 and for violating principles of natural justice by not granting sufficient opportunities for personal hearing. Petitioner's arguments: The petitioner argued that Respondent No. 5 lacked jurisdiction as the work was in Assam. They also contended that Respondent No. 3 acted beyond jurisdiction by issuing a demand when Respondent No. 2 had already granted an exemption. The petitioner relied on Clause 14(a) of Mega Exemption Notification No. 25/2012 and Circular No. 1053/02/2017-CX regarding personal hearing opportunities. They also pointed out that the Guwahati Commissioner had withdrawn a similar demand. Revenue's arguments: The judgment does not record specific arguments from the respondents.