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2020 (2) TMI 405 - HC - Service TaxRefund of deducted amount of service tax from the bill of the petitioner - Clause 13(a) of the Notification No. 12/2012-Service Tax dated 17th March, 2012 - HELD THAT - Reliance can be placed in the case of M/S RISHI BUILDERS INDIA PVT. LTD., VEENA SINGH, VALLABHANENI CONSTRUCTION PVT. LTD, M/S SVSVS PRAJECTS PVT. LTD., M/S NARAYANI NIRMAN, M/S NIRANJAN SHARMA, M/S SAJ INFRACON PROJECT INDIA LIMITED, M/S SAJ INFROCON PROJECT INDIA LIMITED VERSUS THE STATE OF BIHAR OTHERS 2015 (7) TMI 1345 - PATNA HIGH COURT where it was held that the concerned respondents are directed to refund the entire amount of service tax deducted from the bills of the petitioners after the issuance of the aforesaid Notification dated 17.3.2012. Respondents are directed to consider the representation dated 09.09.2019 filed by the petitioners, as contained in Annexure-5, in the light of the aforesaid order - petition disposed off.
Issues:
Refund of service tax amount deducted from the bill, Direction to not deduct service tax in the future. Analysis: The petitioners sought a mandamus to refund the service tax amount deducted from their bills and to prevent future deductions. The petitioners argued that the deductions were contrary to the General Exemption provided in Notification No. 12/2012-Service Tax. They contended that the service tax deduction was impermissible as per the exemption granted by the Central Government. The petitioners executed various contracts for road construction and maintenance under the Road Construction Department of Bihar. The authorities had been deducting service tax at 12.36% despite the exemption notification. The respondents justified the deductions by stating that the Estimated Cost Value (ECV) included service tax at 12.36%, which was deducted from the bills. However, the petitioners argued that the tender documents did not mention the inclusion of service tax. The court emphasized that tax collection must be authorized by law, and in this case, the respondents had no authority to collect service tax due to the exemption. The court allowed the writ applications, directing the respondents to refund the deducted service tax amounts and to refrain from collecting such tax in the future as long as the exemption remained valid. The court highlighted that under Article 265 of the Constitution of India, no tax can be levied or collected without the authority of law. The exemption notification clearly indicated that the respondents lacked the authority to collect service tax that was not leviable under the law. Therefore, the court ordered the refund of the entire service tax amount deducted from the petitioners' bills post the issuance of the exemption notification. Additionally, the respondents were restrained from collecting any such tax from the petitioners or other contractors in the future as long as the exemption was in force. The court disposed of the petition in line with a previous order and directed the respondents to consider a representation filed by the petitioners in light of the said order. No costs were awarded, and the petition was disposed of accordingly.
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