2018 (5) TMI 788 – MADRAS HIGH COURT – TMI – Validity of Show Cause Notice demanding service tax – Maintainability of petition – Jurisdiction – Mega Exemption Notification dated 20.06.2012 – renting of immovable property service – Held that: – what is being sought to be taxed is the renting of immovable property and not for excavation work. Therefore, if any remittance being made by the Contractor who has excavated the earth for the purpose of renting of immovable property, will not absolve the petitioner from the proposal made in the SCN.
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The jurisdictional issue, which is pointed out by the learned Additional Advocate General is not purely a jurisdictional issue as it primarily involves adjudication of facts.
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The writ petition is not maintainable and it is premature, for the reason that the impugned order in the writ petition is only a SCN and not an order for the petitioner to be aggrieved – petition dismissed being not maintainable. – W.P.No.6059 of 2018 & W.M.P.No.747
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22) read with Section 66E(a) of the Finance Act; as to why an amount of ₹ 3,85,67,112/- [Rupees three crores eighty five lakhs sixty seven thousand one hundred and twelve only] payable towards service tax for the period from 2012-13 to 2016-17 should not be demanded from the petitioner under "Renting of immovable property" services; as to why interest under section 75 of the Act should not be demanded; as to why penalty should not be imposed under sections 76, 77 and 78 of the Act. In terms of the impugned show cause notice, the petitioner was required to produce all the evidences which they intend to rely upon in support of their defence at the time of showing cause . Further, the petitioner was to indicate in the written reply as to whether they wish to be heard in person before the case is adjudicated. 4. The learned Senior Standing Counsel appearing for the respondents 1 and 2 raised a preliminary objection regarding maintainability of writ petition as the impugned
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ing the optical fibre cables, viz., excavation, which is done by the contractor, who remit the payment inclusive of all taxes and the other being work of restoration, which is done by the Corporation of Chennai. The learned Additional Advocate General submitted that the Central Government in exercise of power conferred under section 93(1) of the Act has issued Mega Exemption Notification 25/2012, dated 20.06.2012 in and by which certain taxable services have been exempted from the whole of the service tax leviable thereon under section 66B of the Act. Referring to clause 13 of the Mega Exemption Notification, it is submitted that services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance for the use of , renovation or alteration for the use of general public is wholly exempted from the payment of service tax and therefore, the 2nd respondent has no jurisdiction to issue the impugned show cause notice. Further, it is rei
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roposal to tax the petitioner, the Mega Exemption Notification will have no application to the case on hand. 7. The learned Standing Counsel appearing for the 3rd respondent reiterated the submissions put-forth by the learned Senior Standing Counsel appearing for the respondents 1 and 2. 8. After elaborately hearing the learned counsel for the parties and carefully perusing the materials on record, I am of the considered view that the writ petition is not maintainable and it is premature, firstly for the reason that the impugned order in the writ petition is only a show cause notice and not an order for the petitioner to be aggrieved. The petitioner challenges the impugned show cause notice on the ground of jurisdiction. The petitioner has challenged the impugned show cause notice primarily on two grounds. Firstly on the ground that it performs public duty and in the process of doing so, there is excavation work and for the said excavation work the concerned contractor, is remitting ta
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fication. Therefore, the disputed questions of fact as to whether the nature of services proposed to be taxed, viz., renting of immovable property would fall under clause 13 of the Mega Exemption Notification has to be adjudicated before the authority. Thus, the jurisdictional issue, which is pointed out by the learned Additional Advocate General is not purely a jurisdictional issue as it primarily involves adjudication of facts. Therefore, I am of the considered view that the petitioner has to necessarily submit their reply to the impugned show cause notice and participate in the adjudication process. Therefore, on the grounds raised by the petitioner, the show cause notice cannot be quashed. 10. For the above reasons, the writ petition is dismissed as not maintainable. However, it is made clear that the observation made in this order are only prima facie observations made while testing the legal question as to whether the writ petition is maintainable or not and these observations wi
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