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2018 (4) TMI 1894 - HC - VAT and Sales TaxLevy of service tax or VAT - works contract with Government of Tamil Nadu through respondents 5 to 15 for carrying out several construction and other works - It is the specific case of the appellant that service tax was not collected from Government / TNHB and that sovereign functions of the State are not liable to tax - HELD THAT:- When service tax was not included in tender notification and collected, appellant is constrained to challenge the very notification itself, on the ground that appellant need not collect service tax and pay to 1st respondent and thereafter to get reimbursed from State / TNHB. The service tax is paid by the appellant and reimbursement is sought for. If any amount has already been collected, then the appellant cannot retain, but to pay to the 1st respondent. But, in the case on hand, no service tax was collected, but the appellant is compelled to pay and thereafter, to get the same reimbursed. Appellant need not be mulcted with liability to pay service tax, which they have not collected from the Government / Tamilnadu Housing Board, and consequently, to pay the same to 1st respondent. Intention not to collect service tax from government for sovereign functions, is the main issue and that is why exemption has been granted earlier. Appellant is entitled for an order of interim injunction - appeal allowed.
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