Facts of the Case

This is a common order of the Madurai Bench of the Madras High Court disposing of three connected mandamus petitions seeking disbursement of service tax, interest and penalty dues for works contract services rendered to the Public Works Department (PWD), Government of Tamil Nadu, during 2015 to 2017. This is a pre-GST Service Tax reimbursement dispute, materially identical in facts to a related petition decided by the same Judge a few weeks later (P.S. Stalin vs Principal Secretary, PWD); GST is not at issue, though the Assistant Commissioner of Central GST and Central Excise, Madurai, was arrayed as a respondent since that office also administers residual service tax matters.

The three petitioners — S. Meenakshi Sundaram, A. Balakrishnan and P. Saravanakumar — were Registered Class I Contractors with the PWD who had executed works contract services for the Department during 2015-2017. A Division Bench of the Madras High Court had earlier held, in related proceedings, that such contractors were liable to pay service tax on the works, while granting them liberty to collect the corresponding amount from the Government before remitting it to the tax authorities. Based on this liberty, the petitioners made a representation dated 18.07.2023 seeking disbursement of the service tax, interest and penalty amounts, but the Government did not act on the claim despite repeated representations.

Issues Involved

  1. Whether the Government (PWD) should be directed to consider and decide the contractors' claims for reimbursement/disbursement of service tax on works contracts executed for the Government during 2015-2017.

Petitioner's Arguments

  • Pursuant to the earlier Division Bench liberty permitting them to collect the service tax amount from the Government, the petitioners had made a representation dated 18.07.2023, which remained unaddressed by the Government despite several follow-ups.
  • Sought a mandamus directing the Government and PWD authorities to disburse the service tax, interest and penalty amount within a time frame fixed by the Court.

Respondent's Arguments

  • The learned Special Government Pleader submitted that the petitioners' claims were under consideration by the Government.

Court Order / Findings

  • The Court held that the first respondent (Government of Tamil Nadu, through the Principal Secretary, PWD) ought to consider the petitioners' cases, noting the Government's own submission that the claims were under consideration.
  • It directed the first respondent to consider the petitioners' cases and pass appropriate orders within twelve weeks from receipt of a copy of the order.
  • The writ petitions were allowed in these terms, without costs; the Court did not itself adjudicate the quantum or entitlement to the service tax reimbursement, leaving that decision to the Government within the stipulated time frame.

Important Clarification

This order is a direction to decide, not a final adjudication of the contractors' entitlement to service tax reimbursement — the Government was simply directed to process and decide the pending representations within twelve weeks. It concerns liability and reimbursement of pre-GST service tax on works contracts and does not touch upon GST law.

Sections Involved

  • Finance Act, 1994 — Service tax on works contract services
  • Article 226, Constitution of India — Writ of mandamus

Decision – In Favour of Petitioners (Contractors)

The Madurai Bench of the Madras High Court allowed the writ petitions, directing the Government to consider and decide the contractors' pending representation for service tax reimbursement within twelve weeks, without itself ruling on the merits of the claim's quantum.

Case Details

  • Court: Madurai Bench of the Madras High Court
  • Case No.: W.P.(MD) Nos. 18200 to 18202 of 2023
  • Coram: Hon'ble Mrs. Justice S. Srimathy
  • Date of Order: 27 July 2023

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.