Sidram Bhuthappa Hirekurabar Vs Union of India (Karnataka High Court)
The petitioner approached the Karnataka High Court seeking several reliefs. First, the petitioner requested quashing of the Order-in-Appeal (OIA No. BGM-EXCUS-000-APP-COMMR-VDJ-088-2025-26), arguing that it was incorrectly issued. Second, the petitioner sought a declaration that the respondent authority was not justified in levying service tax on the entire value of labour charges for the period April 2015 to June 2017. Third, the petitioner requested a direction to allow apportionment or set-off under the Service Tax (Determination of Value) Rules, 2006. The petitioner also sought any other appropriate writ or direction in the interest of justice.
The Court heard arguments from the petitioner and the respondents. The petitioner’s counsel submitted that the issues raised in the present matter had already been addressed by a co-ordinate bench in M/s Karnataka Chinmaya Seva Trust vs. Joint Commissioner of Central Tax (W.P. No. 11154/2023 and connected matters), decided on 03.07.2024.
The respondents did not dispute the legal position established in that judgment, but requested that the matter be remitted to allow the petitioner to submit a reply to the show-cause notice.
The Court reproduced the operative part of the earlier co-ordinate bench judgment, which directed that while disposing of similar petitions, the authorities must consider:
- Whether the petitioners fall outside the definition under Section 65B(44) of the Finance Act, 1994.
- Whether the services are covered under the negative list.
- Whether the services are covered under exemptions under Notification No. 25/2012-ST or other applicable notifications.
- Whether the person is liable to remit service tax under Rule 2(1)(d) and the relevant notifications.
- Whether the claims are barred by limitation as per Supreme Court decisions.
The earlier judgment also clarified that no findings were given on merits or jurisdiction and that all contentions were left open. Petitioners could file replies to show-cause notices upon remand, and legal remedies would remain open after fresh adjudication. It also set aside Orders-in-Original in comparable cases and directed authorities to reconsider matters from the stage of show-cause notice.
