TMI Blog2022 (10) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... x 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 Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Notification No. 41/2009-Service Tax, dated 23rd October, 2009 and Circular No. 116/10/2009, dated 15th September, 2009, the respondents have illegally deducted amounts towards Service Tax @ 4.12% from the bills of the petitioner upto RA Bill No. 44 and the same has been returned upon the representations of the petitioner that the subject works are exempted. Accordingly, the illegally deducted amounts were given to the petitioner in the RA Bill No. 45, dated 29-11-2015. Thereafter, the subject work has been completed by the petitioner to the satisfaction of the respondents as on 19th December, 2019, and necessary completion certificate has also been issued to the petitioner. The case of the petitioner is that the petitioner being exempted from paying any service tax in respect of the contract work, the respondents pursuant to clause 18.1 of the General Instructions to bidders has deducted service tax @ 4.12% from the running account bills of the petitioner. It is the specific grievance of the petitioner that the impugned letter has been issued proposing to effect the recovery of service tax for an amount of Rs. 14.7329 crores and credit the same to the work. Hence, W.P. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts was refunded vide memo Bearing No. CE/Dr.B.R.A.PCSS/DEE-1/AEE-2/PKG-10/12, dated 16-2-2012, and contrary to their own memo, the official respondents are now again trying to recover the service tax amounts from the bills of the petitioners and therefore left with no other alternative, the petitioners have filed the present writ petitions. 6. Per contra, Learned Special Government Pleader appearing on behalf of the Additional Advocate General has stated that an audit objection was raised by the Pay and Accounts Department and as per the directions of the Director of Works Accounts vide Endt. No. DWA/HYD/SO-II/A9/2009-10/258/, dated 9-10-2009, the impugned letters were issued to the petitioners. That the Service Tax payable by the petitioners will have to be recovered from the bills of the petitioners and in case, the petitioners claim any entitlement to the Circulars/Notifications issued by the Government of India, then the petitioners can approach the Service Tax authorities for refund of the recovered Service Tax. 7. Heard the Learned Counsel for the petitioners and the Learned Special Government Pleader appearing on behalf of the Learned Additional Advocate General for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax. 11. Thereafter, the impugned letter has been issued ostensibly on the objections taken by the Director of Works Accounts. A perusal of the same shows the same is endorsed by the Director of Works Accounts as under : Copy communicated to all the JDWAs/PAOs/APADs for information and necessary action and also instructed to observe the following points while admitting the bill. (a) Wherever Service Tax is loaded in the data, the Service Tax has to be credited to the work. (b) Wherever Service Tax already paid by the Agency/Firm/Contractor, the reimbursement of the same can t be permitted and the agency/firm/contractor may be advised to claim reimbursement from the Service Tax authorities. 12. 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, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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