GUWAHATI, India, Oct. 9 -- Gauhati High Court issued the following order on Sept. 9:
1. The instant application under Article 226 of the Constitution of India has been filed challenging an Order-in- Original No. 02/DCG (ST LEGACY)/GHY/2017-18 dated 20.11.2017 issued by the Deputy Commissioner, CGST & CE, Commissionerate, Guwahati. The challenge is based on the contention that the said authority does not have the jurisdiction to pass the said order. It is the case of the petitioner that the subject is under Entry 92C of List I of Seventh Schedule of the Constitution of India which has been omitted by the 101st Amendment of the Constitution with effect from 16.09.2016. Therefore, after the said date the said respondent had no authority or power to levy service tax constitutionally. The petitioner has also based the challenge on the omission of Chapter V of the Finance Act, 1994. It may however be mentioned that at the time of the arguments, it was additionally urged that there was non application of mind in making the impugned demand.
2. As per the facts projected, the petitioner was given a sub-contract by the principal contractor - M/s Simplex Infrastructures Ltd. for construction of NH-31 in the section from KM 1040.300 to KM 1013.000. By the impugned order, a demand of Rs.8,44,789/- (Rupees Eight Lakh Forty-Four Thousand Seven Hundred and Eighty Nine only) has been raised on the aspect of Manpower Recruitment and Supply Agency Services. It has been averred that the notification dated 20.06.2012 No. 25/2012 exempts levy of service tax for construction of road as well as for irrigation works and the work in question pertained to the exempted field. However, the impugned demand has been raised by ignoring the Notification No. 25/2012-ST.
3. I have heard Dr. A. Todi, learned counsel for the petitioner. I have also heard Shri S.C. Keyal, learned Standing Counsel, GST.
4. Dr. Todi, the learned counsel for the petitioner has submitted that the demand notice contain figures in tabular form from where it can be clearly deduced that the levy is on the aspect of supply of manpower. He has highlighted the aspect that the measurement has been used as "cu.m" (cubic meter) and "RMT" (running meter) which are connected with construction work and cannot be connected with the aspect of supply of labour force. He has also drawn the attention of this Court to Form 26AS which relates to the TDS and has submitted that such TDS has been made the basis of the levy which is impermissible in law. He has also highlighted that though some part of the work was for supply of manpower, the levy impugned is by construing the entire job done by the petitioner as that of supply of manpower. He has also placed before this Court a bunch of work order to fortify his submission that the works in question were for construction of roads and for irrigation purpose.
5. The learned counsel has highlighted that the scope of work included bed preparation, concreting etc. whereas, for the supply of manpower there is a separate contract which is on "as per hour basis". He has also submitted that there are purchase orders for supply of materials which has also been included in the impugned levy. He has drawn the attention of this Court to the Notification dated 20.06.2012 which clearly exempts the construction of road under Clause 13(a) and for irrigation work under Clause 12 (d). He has also clarified that the said notification under clause 29 (h) has given such exemption to the sub-contractor. He has submitted that in view of the aforesaid facts and circumstances, the impugned demand is not sustainable in law.
*Rest of the document can be viewed at: (https://hcservices.ecourts.gov.in/ecourtindiaHC/cases/display_pdf.php?filename=rC8SUFuyEFsvB5V61cXUrIcmHfcCkGHml8Lcc3w9ZxwgYNw%2FZSpbFLzAYjZd4RKO&caseno=WP(C)/195/2018&cCode=1&cino=GAHC010006752018&state_code=6&appFlag=)
Disclaimer: Curated by HT Syndication.
