Debojit Deb And Anr Vs Union of India (Gauhati High Court)
The Gauhati High Court allowed a writ petition challenging an Order-in-Original dated 31.03.2023 and the Order-in-Appeal dated 29.02.2024, which had confirmed a service tax demand of ₹60,52,413, along with interest and penalties, for the financial year 2016-17. The demand had been raised under the proviso to Section 73(1) of the Finance Act, 1994, read with Sections 142(8)(a) and 174 of the CGST Act, 2017, while interest and penalties were imposed under Sections 75, 77, and 78 of the Finance Act, 1994.
The petitioners were engaged in executing construction works relating to roads, bridges, and allied infrastructure projects for various Government departments and agencies. They contended that the works contract services rendered during the financial year 2016-17 were exempt from service tax under Entries 12 and 13 of Notification No. 25/2012-ST dated 20.06.2012. According to them, the authorities initiated recovery proceedings solely on the basis of Form 26AS obtained from the Income Tax Department, which merely reflected payments received after deduction of tax at source and could not independently determine service tax liability under the Finance Act, 1994.
The petitioners further argued that the Show Cause Notice dated 21.04.2022 was never served upon them. As a result, they were denied the opportunity to file a reply or participate in the adjudication proceedings, leading to an ex parte order confirming the tax demand, interest, and penalties. They also challenged the invocation of the extended limitation period under the proviso to Section 73(1), contending that there was no allegation or finding of fraud, collusion, wilful misstatement, suppression of facts, or any intentional evasion of tax. After their statutory appeal was dismissed by the Commissioner (Appeals), they approached the High Court.
