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2022 (10) TMI 960 - HC - Service TaxRecovery of Service tax - works contract - Government of Andhra Pradesh has awarded the work of Pranahitha Chevella Lift Irrigation Scheme Link-II Package 7 now renamed as Kaleshwaram Project - Link-II - Package No. 7 - applicability of N/N. 41/2009-Service Tax, dated 23rd October, 2009 and Circular No. 116/10/2009, dated 15th September, 2009 - HELD THAT:- From a perusal of the documents, it is seen that the petitioners have been entrusted with the works of digging up the canal for the purpose of Kaleshwaram Project, as per the Articles of Contract, dated 17-11-2008. As seen from the documents filed by the petitioners, on an earlier occasion, the official respondents duly taking into consideration the exemption granted by the Ministry of Finance, Government of India, vide Notification No. 41/2009-Service Tax, dated 23-10-2009, have released the Service Tax amounts which were earlier recovered from the petitioners’ bills. Admittedly, the Government of India through the Ministry of Finance has issued the notification exempting the payment of Service Tax for certain works done by the Government or on its behalf. Notification No. 41/2009-Service Tax, dated 23-10-2009 makes it abundantly clear that the same is exempting the Service Tax for the canal works done by the Government or on its behalf i.e., the petitioners. Admittedly, in this case, there is no dispute that the petitioners have undertaken the work for digging up the canal system for the purpose of Kaleshwaram Project on behalf of the Government, which is admittedly not a commercial activity, and which is chargeable to service tax. Once the Government of India, through the Ministry of Finance, has granted the exemption to the work contracts in respect of canals and once the circular has been issued clarifying the same, the endorsement made by the Director of Works Accounts is without jurisdiction and contrary to the said exemption granted by the Government of India - It is well settled principle of law that any endorsements or orders made by the officials/Departmental Heads cannot override the provisions of the Act/Rules/Circulars. The official respondents are directed not to recover or deduct any amounts towards Service Tax pursuant to the endorsement of the Director of Works Accounts - Petition allowed.
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