Chennuboyina Chittibabu V. Union of India and Central Board of Indirect Taxes and Customs and Assistant Commissioner of Central Tax Amaravathi and Superintendent of Central Tax and Union Bank of India

WP/9313/2024

AI Insights

Chennuboyina Chittibabu, a subcontractor, challenged the assessment order dated 26-10-2023 issued by the Assistant Commissioner of Central Tax, which levied service tax, interest, and penalties on him for the financial years 2016-17 and 2017-18. The petitioner argued that his services were exempt from service tax as per Notification No.25/2012-Service Tax, but the authorities found him liable based on the lack of evidence supporting his claim. The High Court dismissed the petition, emphasizing the availability of an alternative appellate remedy and the petitioner's failure to substantiate his claims.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 811841 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 30-07-2024
• Assessment Year: misc
• Laws Referred To: Finance Act, 1994, Constitution of India
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: DEPUTY SOLICITOR GENERAL OF INDIA; SANTHI CHANDRA
• Assessee Lawyers: B ABHAY SIDDHANTH MOOTHA
• Keywords: Assessment Order; Constitutional rights; Fundamental rights; Jurisdiction; Mandamus; Penalty; Service tax
• Section: 75; 77(1)(a); 77(2); 78(1)

Judgement Text

"IN THE HIGH COURT OF ANDHRA PRADESH :: (Special Original Jurisdiction) TUESDAY. THE THIRTIETH DAY OF JULY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI AND THE HONOURABLE SMT JUSTICE KIRANMAYEE WRIT PETITION NO: 9313 OF 2024 AMARAVATI MANDAVA Between; Chennuboyina Chittibabu, S/o.C.Venkayya Aged Contractor, R/o,D,No.l2-77, Ring Road Krishna-521456. about 54 years, Occ; Ferry Road, Ibrahimpatnam, ...Petitioner AND 1. Union of India, rep., by its Secretary, Ministry of Finance, New Delhi. 2. The Central Board of Indirect Taxes and Customs Deoartmenfof Revenue, Ministry of Finance, New Delhi uepartment of 3. The Assistant Commissioner of Central Tax Amaravathi COST Division, Central M.G.Road, Vijayawada - 520 002. 4. The Superintendent of Central Tax CGST Range. and Central Excise, Revenue Buildings, GST Bhavan and Central Excise, Ibrahimpatna m 5. The Union Bank of India, Rep., by its Manager, Ibrahimpatnam, NTR District. Ibrahimpatnam Branch, ...Respondents Petition under Article 226 of the the circumstances stated i be pleased to Constitution of India praying that in in the affidavit filed therewith, the High Court may Writ f \"\" ^PP^Pnate Writ more particularly one in the nature of Mandamus declaring the Assessment Order, dated 26-10-2023 in 20231055YK000000B40C i DIN issued by the respondent No.3 herein - (Rupees Six Lakhs Forty Six assessing an amount of Rs.6,46,317/ Thousand Three Hundred and Seventeen) towards service tax for the •’Assessment Year 2016-17 and 2017-18 up to 06/2017 under Section 75 of ' ♦. . • Finance Act, 1994 Penalty of Rs.6,46.317/- under Section 78(1) of the Finance Act, 1994 the value of the sub-contract receipts executed for Government Departments apart from imposing penalty of Rs. 10,000/- under Section 77(1) (a ) of the Finance Act, 1994 and penalty of Rs. 10,000/- under Section 77(2) of the Finance a Act, 1994, eventhough Sub-contractors executing Government Work Contracts is exempted from service tax vide the Notification No.25/2012-Seivice Tax dated 20.06.2012 and the consequential attachment order, dated 05.03.2024 issued by the respondent No.3 freezing my bank account with the respondent No.5 as arbitrary. Illegal, as one without jurisdiction, contrary to Finance Act, 1994 apart from being violative of the Fundamental and Constitutional rights guaranteed to the me under Article 14, 19, 21 and 300-A of the Constitution of India and consequently a) Set aside the assessment order DIN 20231055YK000000B40C issued by the respondent No.3 herein assessing an amount of Rs.6,46,317/- (Rupees Six Lakhs Forty Six Thousand assessing an Three Hundred and Seventeen) towards service tax for the Assessment Year 2016-17 and 2017-18 up to 06/2017 under Section 75 of Finance Act, 1994 Penalty of Rs.6,46,317/- under Section 78(1) of the Finance Act, 1994 on the value of the sub contract receipts executed for Government Departments apart from imposing a penalty of Rs. 10,000/- under Section 77(1) (a) of the Finance Act, 1994 and penalty of Rs. 10,000/- under Section 77(2) of the Finance Act, 1994 b) Set aside the Attachment Order, dated 05.03.2024 respondent No.3 freezing my bank account with the respondent No.5. issued by the lA NO: 1 OF 2n?d Petition under Section 151 CPC stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of the Assessment praying that in the circumstances Order, dated 26-10- issued by the respondent No.3 2023 in DIN;20231055YK000000B40C pending disposal of the above Writ Petition. lA NO: 2 OF 2024 Petition under Section 151 CPC stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the 05.03.2024 issued by the respondent No.3 freezing petitioners with the respondent No.5 pending disposal of the above Writ praying that in the circumstances operation of the Attachment Order, dated bank account Petition. Counsel for the Petitioner: SRI B.ABHAY SIDDHANTH Counsel for the Respondent No.1: DEPUTY SOLICITOR GENERAL of INDIA Counsel for the Respondents 2 to 4: SRI SANTHI CHANDRA, SC for CBIC MOOTHA Counsel for the Ftespondent No.5: The Court made the following order: 1 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) APHC010184982024 [3481] TUESDAY, THE THIRTIETH DAY OF JULY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI THE HONOURABLE SMT JUSTICE KIRANMAYEE MANDAVA WRIT PETITION NO: 9313/2024 Between: ...PETITIONER Chennuboyina Chittibabu AND ...RESPONDENT(S) Union Of India and Others Counsel for the Petitioner: 1.B.ABHAY SIDDHANTH MOOTHA Counsel for the Respondent(S): 1. . The Court made the following: ORDER: {per Hon’ble Smt. Justice Kiranmayee Mandava) Heard Sri B.Abhay Siddhanth Mootha, learned counsel for the petitioner and Ms. Santhi Chandra, learned Junior Standing Counsel for C.B.I.C. for respondent Nos.2 to 4. 2. The writ petition is filed against the order in original No.13/2023-24-S.Tax, Assessment Order dated 26.10.2023 passed by the Assistant Commissioner of Central Tax and Central Excise, levying service 2 tax, interest and penalty. The relief sought in the writ petition is as under: “pleased to issue an appropriate order or direction more particularly one the nature of Writ of Mandamus declaring the Assessment 26.10.2023 in DIN:20231055YK000000B40C issued by the herein assessing an amount of Rs. 6.46.317/- (Rupees Six Lakhs Forty Six Thousand Three Hundred and Seventeen) towards Assessment Year 2016-17 and 2017-18 Finance Act. 1994 Penalty of Rs 6.46.317/- under Section 78(1). of the Finance Act, 1994 on the value of the sub-contract receipts executed for Government Departments apart from imposing a penalty of Rs. 10,000/- under Section 77 (1) (a) of the Finance Act, 1994 and penalty of Rs under Section 77(2) of the Finance Act, 1994 executing Government Work Contracts is exempted from service tax vide the Notification No. 25/2012-Seivice in Order dated respondent No. 3 service tax for the up to 06/2017 under Section 75 of ■ 10,000/- even though Sub-contractors Tax, dated 20.06.2012 consequential attachment order, dated 05.03.2024 issued by the No. 3 freezing petitioner bank account with the respondent No Illegal, as one without Jurisdiction, contrary to Finance Act, being violative of the Fundamental and Constitutional rights guaranteed to the petitioner under Article 14. 19, 21 and 300-A of the and consequently: and the respondent 5 as arbitrary, 1994 apart from Constitution of India a) Set aside the Assessment Order, dated 26.10.2023 in DIN. 20231055YK000000B40C issued by the respondent No. 3 herein assessing an amount of Rs.6.46,317/- (Rupees Six Lakhs Forty Thousand Three Hundred and Seventeen) towards service tax for the Assessment Year 2016-17 and 2017-18 up to 06/2017 under Section 75 of Finance Act. 1994 Penalty of Rs.6,46.317/- under Section 78(1) of the Finance Act 1994 on the value of the sub-contract receipts executed for Government Departments Six apart from imposing a penalty of Rs. 10,000/- under Section 77 (1) (a) of the Finance Act, 1994 and penalty of Rs. 10,000/- under Section 77(2) of the Finance Act, 1994. b) Set aside the Attachment Order, dated 05.03.2024 issued by the the respondent respondent No. 3 freezing petitioners bank account with No. 5. //i £ It is contended that the petitioner is engaged in the business of sub-contractor to the main contractor. It is relevant period for the financial year 2016-17 and 2017-18, awarded contract for laying CC Road from * 3. execution of works contracts as a stated during the D. Puma chandara Rao was New Ibrahimpatnam to. Old Ibrahimpatnam during the period of Krishna one Pushakaras. And that the said D.Purnachandra Rao executed sub-contract in execution of the work. Thus he has executed the favour of the petitioner for subcontract of laying CC road. The contractor while remitting the payment for execution of the sub-contract had deducted TDS at 0.1%. On the basis of the said information as found in the income-tax portal, it is stated that the notice dated 03.02.2021 requiring the petitioner to 4'^ respondent had issued a furnish fhe copies of the Returns in Form ST-3 and income-tax Returns, for the financial year 2016-17 and 2017-18. and the copies of work orders/contracts/agreements, tax invoices etc. The said notice was followed by another notice dated 28.06.2021. Thereafter a show cause notice dated issued to the petitioner stating that the petitioner had 20.10.2021 was rendered taxable services during the relevant period, and having declared from sub-contracts, and paid income-tax, however, failed to pay the Therefore, the petitioner was income service tax by duly filing the ST-3 returns. why the tax towards the service tax should not be also the corresponding interest for delay in payment and asked to show cause as to collected and penalty. 4 4. It is stated that pursuant to the said show cause notice, the authorized representative of the petitioner appeared before the authorities and filed objections dated 03.12.2021 to the show-cause notice stating that the works executed by the petitioner are exempt from payment of service tax as provided under the notification issued by the Central Government in No.25/2012-Service Tax, dated 20.06.2021. The respondent No.3, thereafter vide impugned proceedings dated 26.10.2023 has passed the order in-original No.13/2023-24-S.Tax, observing that the petitioner is liable to pay the service tax, along with corresponding interest and penalty. Thus the 3'^' respondent quantified the liability of the petitioner as under; \"Service Tax Rs.6,46,317/-, penalty of Rs.10,000/- under Section 77 (1) (a) of the Finance Act, 1994, penalty of Rs.10,000/- under Section 77 (2) of the Finance Act, 1994 and penalty of RS. 6,46,317/- under Section 78 of the Finance Act, 1994.” Assailing the same, the present writ petition is filed by the petitioner contending that although against the impugned proceedings of the 3'^^ respondent, an appeal lies to the Commissioner (Appeals), however, since the order of the 3^^^ respondent is without jurisdiction and is in violation of the principles of natural justice. The learned counsel for the petitioner contends that the services rendered by him to the main contractor are exempted from payment of service tax. The adjudicating authority without taking into consideration the objections raised by the petitioner has passed the impugned order-in-original, which is not sustainable and accordingly prayed for set aside of the same. 5. 5 6. The learned counsel against the order-i appearing for the respondents in-original, an appeal lies to the contended that as commissioner of customs the remedy of appeal the and central excise (Appeals). Bypassing has approached this Court petitioner therefore the writ petition is not maintainabie and not establish before the that the petitioner did the services rendered by the assessing authority as to how exempt from the liability of service petitioner are tax. 7. Considered the rival submissions and perused the material on record. 8. As against the order-i Commissioner (Appeals). However, without petitioner the order of the 3'\"^ services rendered by it to the service tax in terms of the 20.06.2012. 'n-original statutory appeal lies to the availing the said remedy the has approached this Court respondent is without jurisdiction, main contractor are Notification No.25/2012-Service stating that in as much as the exempt from payment of Tax, dated 9. The 3'\"' respondent after observed as under; considering the objections of the petitioner has “The notices had Sri D.Purnachandra Rao not produced 3ny agreement entered with nor relevant documents evidencing that the notices executing the work relating to provision of CC is evident from the Completion Report. Road to Pushkar Ghat received sub-contract work for Road to Pushkar Ghat Further, it i. pertaining to providing CC ■ '^^me/particulars nowhere not performed/executed that the noticee’s appeared in the said completion report since he had Thus, it is clear that there i prove that the said work has been taken IS no evidence to up/executed by the notices.\" 6 10. Though the petitioner had claimed the services to be exempt from payment of service tax, he did not place before the authority the relevant material in support of his contention despite several opportunities being afforded to him. In the light of the same it cannot be said that the assessing authority has exceeded his Jurisdiction or acted without jurisdiction, in passing the order impugned in the writ petition or the order suffers from violation of principles of natural justice. 11. Learned counsel for the petitioner placed reliance on the P-4, in support of his contention that the petitioner is not liable to pay any service tax, as the petitioner was a sub-contractor, material papers filed along with the writ petition agreement appearing to be issued in favour of the petitioner, awarding subcontract by the said Purnachandra Rao, i.e., the alleged main contractor, that the date of the said so called ‘agreement’ and the address mentioned in the said ‘agreement’/letter (P-4 at Pg 44), is as under; However, it is noticed by us, from the P-4 a copy of the alleged Ph:0866-2873090 Mobile:9848'1 25415 Kattubadi Palem (P.O), Via Kondpalli, G.Koduru Mandal, VIJAYAWADA RURAL, N.T.R.Dist.-521228. Andhra Pradesh E-mail: sravanicon(S)gmail.com D.Purna Chandra Rao Civil Contractor Date: 5-10-2016 To CHITTIBABU CHENNEBOINA, 12-77, RING CENTRE, IBRAHIMPATNAM, KRISHNA-521456, ANDHRA PRADESH. 4 7 As noted from the above the address of the main contractor is mentioned as Kattubadipalem (P.O), Konduru Mandal, Vijayawada Rural, However, the said letter/agreement is dated 05.10.2016, 12. NTR District, apparently as on the date of the so called agreement there was no District by name “NTR District”, which we take judicial notice, came into being recently in the year 2022, in Districts reorganization in Andhra Pradesh. Therefore prima facie in our view we cannot rely on the said document and it appears as if the has been invented or created for the purpose of the present writ petition. The said document cannot be taken into consideration for adjudication of the « under dispute by this Court as the said alleged agreement was also not same issue filed before the adjudicating authority. On the basis of the material before it, the respondent has passed the order in original. If the petitioner is really aggrieved by the said order remedy is to file an appeal before the appellate authority before which the petitioner can in a better manner, if he has some material to support his contention, establish his case of sub-contract. It could not be argued by learned counsel for the petitioner as to how the order is without jurisdiction. The issue of the work in question was done as contractor or sub-contractor is one of fact on which finding has been recorded by the 1®‘ authority against the petitioner. No justifiable ground has been pointed out by the petitioner seeking indulgence of this court under Article 226 of Constitution of India. 13. 14. 15. Ik 8 16. Accordingly, we are not inclined to entertain the writ petition. The Writ Petition is dismissed on the ground of availability of alternative remedy to the petitioner. No order as to costs. As a sequel, pending interlocutory applications, if any, shall stand closed. Sd/- M. SRINIVAS ASSISTANT REGISTRAR / Action officer / //TRUE COPY// To, 1. One CC to Sri B.Abhay Siddhanth Mootha, Advocate [OPUC] One CC to Sri Deputy Solicitor General of India, Advocate [OPUC One CC to Sri Santhi Chandra, SC for CBIC [OPUC] Two CD Copies 2. 3. 4. RAM t •_V> /• •Tf « > HIGH COURT i 3*ff > i 5. i** ‘T « DATED:30/07/2024 ANO«^ o o s 13 AUG 202'! m OOfS •i'// ORDER WP.No.9313 of 2024 DISMISSING THE WP WITHOUT COSTS "