2019 (12) TMI 858 - HC - Service Tax

Works Contract Composition Scheme - works contract services of Supply and Installation of Electrical Equipments - abatement under N/N. 1/2006-ST dated 01.03.2006 - HELD THAT - There is nothing in the order of the learned Tribunal, which could deny the benefit of the Composition Scheme to the Assessee and therefore, the order of remand passed by the learned Tribunal on 01.06.2018 directing the Assessee to go for regular assessment instead of Composition Scheme merely because the option was not conveyed to the Department on the part of the Assessee in writing, even though the Revenue had not prescribed any format for the same, could not be a valid ground to deny the benefit to the Assessee. The failure on the part of the learned Tribunal to do so resulted in miscarriage of justice and unnecessary litigation brought before this Court firstly in the form of writ petition, which upon the objection raised from the side of the Revenue, which also cannot be appreciated much, had to be converted into a regular appeal under the provisions of Section 35G of the Act. Matter remanded to the learned Tribunal with a request to pass fresh orders in accordance with law - appeal allowed by way of remand.

Summary

Issues:
1. Application of Works Contract Composition Scheme to the Assessee's case.
2. Rejection of Rectification Application by the Tribunal.
3. Denial of benefit of Composition Scheme to the Assessee.

Issue 1: The High Court addressed the appeal filed by M/s.GE T & D India Limited regarding the application of the Works Contract Composition Scheme to their case. The Tribunal had remanded the case to the assessing authority for this matter. The Tribunal's order highlighted that the Assessee would be entitled to assessment under Works Contract service and payment of service tax only on the value of the service portion. The Assessee contended that the Composition Scheme benefit should not be denied as they had paid service tax under the scheme. The High Court examined the Tribunal's decision and emphasized that the Assessee should not be denied the benefit of the Composition Scheme merely due to a procedural deficiency in conveying the option to the Department in writing.

Issue 2: The Assessee's Rectification Application was rejected by the Tribunal, leading to the filing of a writ petition which was converted into a Civil Miscellaneous Appeal. The Assessee argued that the Tribunal erred in rejecting the Rectification Application, citing a prior judgment by the Tribunal in a similar case. The High Court noted that the Tribunal failed to consider the Assessee's reliance on the prior judgment and rectify their mistake, resulting in unnecessary litigation. The High Court concluded that the Tribunal's failure to rectify the mistake led to a miscarriage of justice.

Issue 3: The denial of the benefit of the Works Contract Composition Scheme to the Assessee was a key contention. The Assessee argued that the Tribunal should reconsider the appeal based on a previous judgment allowing a switch to the Composition Scheme even after initially paying service tax at prescribed rates. The High Court agreed with the Assessee's argument, emphasizing that the benefit of the Composition Scheme should not have been denied to the Assessee. The High Court set aside the Tribunal's order and remanded the matter for fresh consideration in accordance with the law.