Case Law Details
AKR Constructions Limited Vs Commissioner Central Goods And Services Tax And Central Excise (Karnataka High Court)
In the case AKR Constructions Limited Vs Commissioner Central Goods and Services Tax and Central Excise, the Karnataka High Court dismissed a writ petition challenging a service tax order that held the petitioner liable for Rs. 24.03 crore. The petitioner argued that the services in question were exempt under a 2012 notification, but failed to submit supporting documents during the initial proceedings. The respondent contended that the petitioner did not respond to a pre-show cause notice and missed multiple personal hearing opportunities, leading to the issuance of the impugned order. The court determined that the question of whether the services were exempt from service tax could not be resolved in a writ petition and must be adjudicated by the appellate authority. Consequently, the court dismissed the petition but allowed the petitioner to file an appeal under Sections 85 and 86 of the Finance Act. The time spent pursuing the writ petition will be excluded from the limitation period for filing the appeal. All issues were kept open for consideration in the appellate process.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
This petition is filed challenging the order dated 04.09.2023, passed by respondent No.1 at Annexure-A, by which the petitioner is held liable to pay Rs.24,03,05,350/-towards service tax and penalty, interest etc.,.
2. The learned counsel for the petitioner argued that the service tax imposed is on the services, which are exempted by virtue of the notification dated 20.06.2012, issued by the Government of India. Therefore, the impugned order passed by respondent No.1 is one without authority of law.
3. He further submits that the petitioner due to unavoidable circumstances was not in a position to submit documents to substantiate that the services rendered by the petitioner were exempted under the notification, therefore sought for quashing of the impugned order and provide an opportunity to the petitioner to substantiate his claim before the 1st respondent.
4. Learned counsel for respondents No.1 and 2 submits that the petitioner did not reply to the pre-conciliation notice and though replied to the show cause notice, did not furnish any documents to substantiate that the services rendered by him were exempted under the notification. He further submitted that though several opportunities of personal hearing were provided to the petitioner, the same was not availed by the petitioner. Therefore, respondent No.1 left with no option, on the basis of available material on record has rightly passed the impugned order.
5. He further submits that the impugned order is passed under section 73 of the Finance Act, against which an appeal is provided under section 85 and 86 of the Act. Therefore, the petition filed without exhausting the efficacious alternative remedy of appeal is not maintainable.
6. Considered the submissions made by learned counsels for the parties.
7. A perusal of the impugned order indicated that the petitioner was issued with a pre-show cause notice for conciliation fixing the date of hearing on 20.04.2021. However, the petitioner did not attend the same. Therefore, a show cause notice was issued on 20.04.2021 calling upon the petitioner as to why service tax should not be imposed on the services rendered by the petitioner. The petitioner replied to the show cause notice stating that the services rendered are exempted from payment of service tax under the notification and therefore sought to drop the proceedings.
8. A perusal of the impugned order indicates that except stating that the services rendered are exempted from service tax, the petitioner has not produced any documents to substantiate that the services rendered by him were exempted from service tax. Therefore, respondent No.1, on the available material on record has rightly passed the impugned order after providing several opportunities of personal hearing to the petitioner, which the petitioner did not avail without any sufficient cause.
9. Whether the services of the petitioner are exempted from service tax is a matter which requires consideration by the appellate authority, and since there is a dispute as to whether the services rendered by the petitioner are exempted from service tax, the same cannot be adjudicated in this petition, and it is open for the petitioner to approach the appellate authority for redressal of his grievances.
10. Accordingly the petition stands dismissed, reserving liberty to the petitioner to file an appeal under section 85 and 86 of the Finance Act. The time spent in prosecuting this petition to be excluded for the purpose of computation of limitation period in preferring the appeal before the appellate authority.
All contentions are kept open.
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