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TMI Blog2022 (10) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... sh has awarded the work of Pranahitha Chevella Lift Irrigation Scheme Link-II Package 7 now renamed as Kaleshwaram Project - Link-II - Package No. 7. The nature of work included "Detailed investigation, designs and execution of lift irrigation scheme for drawl of 146.24 TMC of water from Medaram (v), Dharmaram (M), Karimnagar District to lift 32 TMC of water to drop in Kakatiya Canal and to facilitate to carry balance of 114.24 TMC water further with the components such as approach channel, CM & CD works, lifts, pressure mains and lined tunnels with all associated civil, hydromechanical and electro mechanical works, improvements and enhancing the capacity of existing Medaram Reservoir and improvements to Kakatiya Canal near Ragampet." Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 10387 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at on an earlier occasion, the official respondents by taking into consideration the very same Circulars and Clarifications issued by the Ministry of Finance, Government of India, have refunded the amounts which were deducted towards the Service Tax. Learned Counsel has drawn the attention of this Court to the Circulars issued by the Ministry of Finance, Government of India, whereby a clarification has been issued stating that as the canal system built by the Government or under Government projects is not falling under commercial activity, the canal system built by the Government will not be chargeable to service tax. Learned Counsel has stated that the petitioners are undertaking canal works for the Kaleshwaram Project on behalf of the Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. The relevant portion of the Notification No. 41/2009-Service Tax, dated 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o service tax." 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 Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r other Heads may be issued memo or departmental action may be initiated against them for not recovering/deducting the Service Tax as directed by the Director of Works Accounts. Even though the said apprehension is misplaced, however, having regard to the apprehension expressed by the Learned Special Government Pleader and also to safeguard the Subordinate Officers, it is made clear that if any demand is raised by the authorities of the GST, then, the petitioners alone will be liable for payment of the demanded Tax and the Officers of the respondent Departments cannot be made liable or be prosecuted for not recovering the Service Tax amounts for the works undertaken by the petitioners which is impugned in the present writ petitions. 14.&em ..... X X X X Extracts X X X X X X X X Extracts X X X X
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