MD. Baharul Islam Vs Union of India (Gauhati High Court)
Conclusion: The question whether the contractual work was an exempt construction activity or taxable manpower supply required fact-finding, which was beyond the jurisdiction of the writ court as Court did not sit in appeal or reappreciate evidence, but only reviews the decision-making process, therefore, assessee had an efficacious appellate remedy under the statute.
Held: Assessee was a subcontractor engaged by M/s Simplex Infrastructures Ltd. for work on the National Highway-31 as well as related irrigation work. According to him, he work entrusted was in the nature of construction, including included bed preparation, concreting etc. which were squarely covered by the exemption granted under Notification No. 25/2012-ST, particularly Clauses 13(a), 12(d) and 29(h). Department, however, construed the entire job as one of supply of manpower and treated it as a taxable service. Referring to specific work orders, including one dated 15.10.2009, Department held that the contracts were in substance manpower supply, raising a demand of ₹8,44,789 through an Order passed by the Deputy Commissioner, CGST and Central Excise, Guwahati. Assessee submitted that the demand notice itself contained construction measurements such as “cubic meter” and “running meter” and that the authority had wrongly relied on Tax Deducted at Source (TDS) entries within Form 26AS without recognizing that the work was covered by the exemption notifications. It was thus contended that construing the entire contract as manpower supply was erroneous. Department, argued that the adjudicating authority had considered the documents and correctly concluded that the relevant contracts pertained to manpower supply. He further contested the premises on which the present writ was instituted, contending that the matter was already settled by the Gauhati High Court in Laxmi Narayan Sahu vs. Union of India and Ors. (2018). It was held that assessee’s contracts comprised two distinct elements: (i) construction of roads and irrigation works (exempt), and (ii) supply of manpower (taxable). Adjudicating authority considered Notification No. 25/2012-ST and granted exemption for construction; the levy was confined to manpower supply. The grievance that the entire work had been treated as manpower supply raised disputed questions of fact, not amenable to writ jurisdiction. It was settled law that in certiorari jurisdiction under Article 226, this Court did not sit in appeal or reappreciate evidence, but only reviews the decision-making process. Assessee had an efficacious appellate remedy under the statute. accordingly, the writ petition was dismissed with liberty to assessee to pursue the statutory appeal.
