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Issues involved: Challenge to vires of provisions of The Finance Act, 1994, legality of demand raised by order in original, applicability of service tax on construction work, timeliness of show cause notice, grant of interim relief.
Challenge to vires of provisions of The Finance Act, 1994: The petitioner, a contractor, challenged certain provisions of The Finance Act, 1994. The original petition was amended to highlight that an order had been passed against the petitioner, who had filed an appeal before the Tribunal with a pending stay application. The petitioner argued that the demand raised by the order was illegal and without jurisdiction, especially regarding service tax on construction work for government or educational institutions. The petitioner contended that the show cause notice was time-barred and lacked material for invoking the extended period of limitation. Legality of demand raised by order in original: The petitioner argued that the demand raised by the order in original was illegal and without jurisdiction. The petitioner claimed that no service tax was payable on construction work for government or educational institutions. The petitioner asserted that they had already discharged their liability to pay service tax on the services provided. The respondent, however, contended that the order in original was not the subject matter of the writ petition and was already under challenge before the Tribunal. Applicability of service tax on construction work: The petitioner, a contractor, argued that no service tax was payable on the construction work carried out for government or educational institutions. The petitioner claimed that the demand of service tax by the order in original was patently illegal. The petitioner contended that they had fulfilled their obligation to pay service tax on the services provided. Timeliness of show cause notice: The petitioner contended that the show cause notice was barred by time and lacked material to invoke the provision of the extended period of limitation. The respondent, however, maintained that the order in original was not the subject matter of the writ petition and was already under challenge before the Tribunal. Grant of interim relief: The court considered the challenge to the vires of certain provisions of the Act and the pending appeal before the Tribunal with a stay application. The court cited Supreme Court precedents on granting interim relief in such cases. The court found that it was not a fit case to grant interim relief as the order in original was not the subject matter of the writ petition, and an appeal with a stay application was pending before the Tribunal. The court rejected the stay application but directed the Tribunal to consider and decide the stay application expeditiously, providing relief from coercive action to the petitioner until the application's disposal.
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