Case Law Details
GVPR Engineers Limited Vs Union of India (Telangana High Court)
Conclusion: Where there was non-consideration of material evidence by a statutory authority, judicial review by the High Court in exercise of it’s power under Art.226 of the Constitution of India is permissible, and existence of alternative remedy is not a bar for exercise of such power.
Held: Assessee-company was engaged in different business activities such as Commercial or Industrial Construction and Erection, Commissioning and Installation in several States with their registered office at Hyderabad. It had obtained registration under the Finance Act, 1994 at Hyderabad and was paying service tax on such taxable services. It contended that it was paying service tax on all taxable services and filing periodical returns with the Department showing turnover of taxable services and exempted services, service tax payable and service tax paid etc; that it mainly executes works contracts relating to laying of electrical transmission lines and construction of canals for State Governments and also supplies materials needed for execution of these projects by the clients; that it had shown the turnovers of both taxable and ‘exempted’ services in its ST-3 returns; that there was no requirement of showing the trading turnover and ‘non-taxable’ services (for which service tax was not applicable) in the periodical ST-3 returns as the said return did not contain any column for the same; and hence the same were not reflected in the ST-3 returns. However, Commissioner of Central Tax issued a show cause notice proposing to levy service tax, interest and penalty on assessee in relation to works contract service and legal consultancy service by placing reliance on audited statements of profit & Loss account of assessee along with notes for the period 2011-12 to 2014-15 and ST-3 returns filed by assessee. It was held that when there was no such column in ST-3 returns dealing with “non-taxable turnovers”, assessee could not be blamed by Department for not indicating the ‘non-taxable’ turnovers in the ST-3 return and it could not be penalized for the same ignoring all the other material evidence which had already been submitted by assessee to department on various occasions including the audit reports relating to the audit of their accounts, work sheets, etc. Where there was non-consideration of material evidence by a statutory authority, judicial review by the High Court in exercise of it’s power under Art.226 of the Constitution of India is permissible, and existence of alternative remedy is not a bar for exercise of such power. Therefore, the matter was remitted back for fresh consideration.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
In this Writ Petition, petitioner challenges Order in Original No.HYD-EXCUS-Audit-com24-18-19 dt.23.01.2019 passed by the Principal Commissioner of Central Tax, Service Tax Commissionerate, Hyderabad (4th respondent) confirming the service tax of Rs.37,16,16,555/- on exempted non-taxable services during the period 2011-12 to 2014-15.
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