RAVINDRA v. GHUGE AND Y.G.KHOBRAGADE, JJ.) DATE
Legal Reasoning
- 1 -IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD909 WRIT PETITION NO. 6201 OF 2024MS B.T. GHUGE CIVIL ENGINEER AND CONTRACTOR THROUGH HISWIFE SWARNA BABASAHEB GHUGEVERSUSTHE UNION OF INDIA THROUGH THE SECRETARY AND OTHERSMr.Alok Sharma, Advocate for the Petitioner. Mr.D.S.Ladda, Advocate for Respondent Nos. 1 to 4. ( CORAM : RAVINDRA V. GHUGE AND Y.G.KHOBRAGADE, JJ.) DATE : JULY 4, 2024PER COURT : 1. The Petitioner has put forth prayer Clauses (A), (B) and©,as under :-(A)This Writ Petition may kindly be allowed by holding that, thenotification no.25/2012 is squarely applicable and thepetitioner is not liable to pay the service tax for the servicesprovided to the Government Authority. (B)That the Hon’ble Court may set aside the order passed by theAdditional Commissioner of Central Excise of OIONo.97/ST/TPI/ADC/2023-24 dtd.28.08.2023 and remand thematter back to the Additional Commissioner to decide the issuekhs/July 2024/6201 - 2 -afresh by according an opportunity of personal hearing.(C)That the Hon’ble Court may direct the respondent no.3 todecide the application seeking rectification of mistake byconsidering the submissions along with the annexure afresh.2.We have extensively heard the learned Advocates for therespective sides.3. The Petitioner widow, sole proprietary firm claimsexemption on the basis of Service Tax Mega Exemption NotificationNo.25/2012, dated 20th June, 2012 issued by the Ministry of Finance,Government of India. More particularly, reliance is placed on Clause12, which reads as under :-“12. Services provided to the Government, a local authority or agovernmental authority by way of construction, erection,commissioning, installation, completion, fitting out, repair,maintenance, renovation or alteration of --[a] civil structure or any other original works meant predominantly foruse other than for commerce, industry, or any other business orprofession ;khs/July 2024/6201 - 3 -[b] a historical monument, archaeological site or remains of nationalimportance, archaeological excavation, or antiquity specified under theAncient Monuments and Archaeological Sites and Remains act, 1958(24 of 1958);[c] a structure meant predominantly for use as (I) an educational, (ii) aclinical, or (iii) an art of cultural establishment ; [d] canal, dam or other irrigation works ; [e] pipeline, conduit or plant for (I) water supply (ii) water treatment,or (iii) sewerage treatment or disposal ; or [f] a residential complex predominantly meant for self-use or the use oftheir employees or other persons specific in the Explanation 1 to clause44 of section 65B of the said Act;” 4.The Petitioner has challenged the order passed by theAdditional Commissioner of Central Excise dated 28.08.2023, on theground that the concerned authority has recorded in paragraph Nos.21, 22, 23 and paragraph 34 (operative part of the order), as under :-“21. The issue before me to decide is whether the services provided bythe noticee were exempted from Service Tax or to demand Service Taxof Rs.86,38,193/- (Including Education Cess, Secondary & HigherEducation Cess, Krishi Kalyan Cess and Swatch Bharat Cess) for the FY2015-16 & 2016-17 along with penalty under Section 70, Section 77,khs/July 2024/6201
Legal Reasoning
- 4 -Section 78 and Interest under Section 75 of the Finance Act, 1994.22. Ongoing through the reply to SCN dated 17.03.2023, I find that thenoticee submitted that their total turnover is to the Government ofMaharashtra which is Exempted as per Notification 25/2012 dt.20.06.2012 vide Sr No.12 A. and further they requested to drop theimpugned SCN. However, I find that the noticee falled to submit anydocuments in support of claiming exemption under Notification25/2012 dt. 20.06.2012 vide Sr No.12 A. It is settled legal position thatto claim any sort of exemption, the onus is on the claimant only toprove and satisfy that they are rightly entitled to claim exemption.23. Hon'ble Courts in several decisions have held that to avail taxexemption under a Notification, burden to proof for its entitlement ison the assessee claiming exemption. The reliance is placed on thedecision of Hon'ble Supreme Court's Constitutional Bench in the case ofCommr. of Customs (Imp), Mumbal V/s. Dilip Kumar and Companyreported in 2018 (361) ELT 577 (SC). The relevant para 52 isreproduced below :"To sum up, we answer the reference holding as under -1) Exemption notification should be interpreted strictly; the burden ofproving applicability would be on the assessee to show that his casecomes within the parameters of the exemption.2) When there is ambiguity in exemption notification which is subjectto strict Interpretation, the benefit of such ambiguity cannot be claimedby the subject/ assessee and it must be interpreted in favour of thekhs/July 2024/6201 - 5 -revenue.3) The ratio in Sun Export case (supra) is not correct and all thedecisions which took similar view as in Sun Export Case (supra) standsover-ruled."34. Accordingly, I decided the case and pass the following order :- ORDERi. I confirm the Service Tax demand of Rs.86,38,193/- (Rupees EightySix Lakhs Thirty Eight Thousand One Hundred Ninety Three only)(Including Cess) under erstwhile Section 73(1) of Finance Act 1994read with Rule 6 of Service Tax Rule 1994 read with Section 174 ofCGST Act, for non-payment of Service Tax on taxable Serviceprovided / received for the period 2015-16 & 2016-17.ii. I order recovery of Interest on the Service Tax amount ofRs.86,38,193/- at appropriate rate under erstwhile Section 75 of theFinance Act 1994 read with Section 174 of CGST Act, 2017.iii. I impose Penalty of Rs.86,38,193/- up on the noticee under Sections78 of the Finance Act, 1994 read with Section 174 of the CGST Act,2017. However, benefit of reduced penalty @25% of the service tax isavailable with noticee if service tax, interest and reduced penalty is alsopaid within a period of thirty days of the date of receipt of the order ofCentral Excise Officer determining the amount of service tax under sub-section (2) of Section 73 of the Finance Act, 1994 in terms of secondproviso of Section 78(1) of Finance Act, 1994 read with Section 174 ofthe CGST Act, 2017.khs/July 2024/6201 - 6 -iv. I impose penalty of Rs. 80,000/- (Rupees Eighty Thousand only)under erstwhile Section 77(2) of the Finance Act, 1994 read withSection 174 of CGST Act, 2017, late fee under section of 70 of theFinance Act 1994 read with Rule 7C of Service Tax Rules 1994, on theassessee for non-filing of ST-3 returns.V. I impose penalty of Rs.10,000/- (Rupees Ten Thousand only) undererstwhile Section 77 (1)(a) of the Finance Act, 1994 for failure to takeregistration under Section 69 of the Act read with Rule 4 of the Rules,1994;”5.The grievance of the Petitioner has it’s origin, in some whattragic circumstances. The Petitioner firm was a sole proprietary firm.The sole proprietor, the Petitioner’s husband, committed suicide on18.10.2022. His widow (present Petitioner), was not connected withthe said proprietary firm. A show cause-cum-demand notice dated24.04.2021 was issued under section 174(2) of the Central Goods andService Tax Act, 2017. Since the Proprietor had committed suicide, hiswife has tendered a reply on 17.03.2023 setting out therein that theentire work assignment which the proprietary firm had acquired, waswith the State Departments/State instrumentality. Hence, an exemptionwas sought under Clause 12 of the above referred notification, dated20th June, 2012.khs/July 2024/6201 - 7 -6.This contention was met with an order under ParagraphNos. 21, 22 and 23 reproduced above. The authority has recorded inparagraph 20 that except the copy of the show cause notice and thereply dated 27.03.2023, no other record or documents have beenplaced on record. It is in this circumstance that the concerned authorityconcluded that it is the noticee who has to prove exemption and unlesssuch exemption is proved, there can be no exemption in favour of thenoticee. Based on such a conclusion, the operative order was passedbelow Paragraph No. 34, which is reproduced above.7.The appeal is preferred by the Petitioner firm through thewidow under section 85 of the Finance Act, 1994. The said appeal isstill pending and the same is not yet decided.8.The learned Advocate for the Petitioner submits that insimilar circumstances, in a matter pertaining to the CGST and CentralExcise, this Court (Coram : K.R.Shriram and Jitendra Jain, JJ.) haspassed an order dated 24.06.2024, in WP No.2876/2021 and2891/2021 (Sanjeev Suresh Desai Vs. Union of India and Others). Onperusal of the said order, we find that the Petitioner had preferred ankhs/July 2024/6201 - 8 -appeal and the Appellate Authority had rejected the appeal on theground that the Appeal ought to have been filed within the limitationprescribed. The Appeal was filed belatedly and there was no provisionunder the Law to condone the delay.9.In the present case as well, the learned Advocate for theGST Department submits that under the provisions of the GST Act,there is no provision for condonation of delay in a belatedly filed appealand the pending appeal of the Petitioner is bound to be rejected. Hesubmits that the Appellate Authority, in the absence of any provision,cannot and will not condone the delay and simply dismiss the Appeal ofthe petitioner.10.The learned Advocate for the Petitioner, therefore, submitsthat this Petition challenging the first order of the Respondent No.3Authority, may be dealt with on the presumption that the Appeal is asgood as rejected. He submits that this Court may observe in this orderthat the Appeal is disposed off and the challenge to the first orderpassed by Respondent No.3, may be entertained. khs/July 2024/6201 - 9 -11.In Sanjeev Desai (supra), this Court has recorded inparagraph No.11 that the concerned Appellate Authority cannot beblamed since it did not have the power to condone the delay. It wasalso recorded in paragraph No.5, that the Court was inclined to exerciseit’s jurisdiction under Article 226 of the Constitution of Indiaparticularly in view of Article 300A of the Constitution of India. Wedeem it appropriate to adopt the same course. 12.We record the statement of the Petitioner that the pendingappeal be declared as disposed off as the delay cannot be condoned.The Appellate Authority shall, therefore, dispose off the said Appeal asrejected. 13.We find that the Petitioner’s case stands on a better footingin comparison to the facts emerging in Sanjeev Desai (supra). ThePetitioner was totally unconnected with the proprietary firm, whichwas operated by her husband. After he committed suicide, thePetitioner was in complete disarray and in a state of shock. Thecircumstances in which her husband passed away, created mental agonyand she was not able to maintain her sanity for quite some time. Afterkhs/July 2024/6201 - 10 -she noticed certain documents, which were received in the name of herdeceased husband, since the Department was also oblivious of thedemise of the Proprietor, that she submitted a reply to the notice. Thisled to the passing of the impugned order. On legal advise, shepreferred an Appeal. 14.On the merits of the impugned order dated 28.08.2023,passed by Respondent No.3, as recorded below paragraph Nos. 3 and 4hereinabove, it is obvious that Respondent No.3 dismissed the claim ofthe deceased on the sole ground that adequate documents were notplaced on record to indicate that the said Proprietory firm was eligiblefor an exemption under Clause 12 of the Notification dated 20.06.2012,reproduced above. It is also recorded in the impugned order that hadthe Noticee produced the documents in support of the claim forexemption, the matter could have been looked at from that point ofview. It was also recorded that the onus of placing such documents onrecord, lay on the claimant. It was finally recorded that as the relevantdocuments were not before the said Authority, the claim was rejected. 15.The learned Advocate for the Department submits on thekhs/July 2024/6201
Decision
- 11 -basis of the documents placed before the Court and in the light ofClause 12 of the Notification dated 20.06.2012, that it would be thenoticee who will have to canvass these points before Respondent No.3to convince the Authority that the Petitioner has an arguable case. Thisis a matter, which can be looked into by the concerned Authority. Hesubmits that this court may not exercise jurisdiction for deciding thesaid issue since the concerned Authority has rejected the claim of thePetitioner only on the ground that the documents were not placedbefore the concerned Authority. He prays, in the alternative, that if thisCourt is inclined to entertain this Petition and set aside the impugnedorder, all contentions of the parties be left open to be considered by theCompetent Authority. 16.In view of the above and in the light of the view taken bythis Court in Sanjeev Desai (supra), this Petition, in the peculiar factsand circumstances of the case, is partly allowed with the followingdirections :-[a]The pending appeal, belatedly filed by the Petitioner on30.05.2024, shall stand disposed off from the file of the AppellateCourt. khs/July 2024/6201 - 12 -[b]The impugned order is quashed and set aside by granting libertyto the Petitioner to place all such documents before Respondent No.3,as the Petitioner may desire, on or before 31.07.2024. [c]The hearing in the matter shall be listed on 12.08.2024, at 11.00a.m. If required, the Petitioner is at liberty to take legal assistance foraddressing Respondent No.3. [d]Let Respondent No.3 pass a reasoned order on the merits of thecase, on or before 31.08.2024. [e]It is made clear that we have not expressed any view on themerits or the Petitioner’s contention thereon and it is only in thepeculiar facts and circumstances of this case, relying on the view takenin Sanjeev Desai (supra), that the impugned order has been set aside. [f]All the contentions of the litigating parties are kept open, to beconsidered by Respondent No.3 / Authority. ( Y.G.KHOBRAGADE, J. ) ( RAVINDRA V. GHUGE, J.)khs/July 2024/6201