Facts of the Case

Three petitioners — K. Nagarajan, S.V. Construction (proprietor N. Chitra), and Arumugam — were Registered Class I Contractors who had carried out works-contract services for the Public Works Department (PWD), Tamil Nadu, during 2014–2018 and 2015–2018 respectively.

They filed three connected writ petitions (W.P.(MD) Nos. 21661 to 21663 of 2023) seeking a mandamus directing the PWD and related respondents (including the Assistant Commissioner of Central GST and Central Excise, Dindigul, arrayed as the 6th respondent) to disburse service tax, interest and penalty-waiver amounts for the services they had rendered, based on representations dated 3 July 2023 and a related letter dated 11 July 2023 from the Executive Engineer.

The petitioners' liability to pay service tax on their works-contract services to PWD had earlier been considered and upheld by a Division Bench of the same High Court, which had granted them liberty to collect the tax from the Government and pay it to the tax department.

Despite this liberty and repeated representations, the Government had not disbursed the amount, prompting the present writ petitions.

Issues Involved

  1. Whether the PWD (State respondents) should be directed to consider and act on the petitioners' pending claims for reimbursement of service tax, interest and penalty amounts.

Petitioner's Arguments

  • The petitioners had already been held liable to pay service tax on their works-contract services, with liberty to collect it from the Government, but despite representations, the Government was not considering or disbursing the amounts due.

Respondent's Arguments

  • The Additional Government Pleader submitted that the petitioners' claim was under consideration by the appropriate authority.

Court Order / Findings

  • The Court held that the appropriate authority (the 1st respondent, i.e., the State Government/PWD) ought to consider the petitioners' case, especially since the claim was stated to be under consideration.
  • The writ petitions were allowed with a direction to the 1st respondent to consider the petitioners' case and pass orders within 12 weeks from receipt of the order.
  • No costs were awarded.

Important Clarification

This order concerns a service-tax claim against the PWD for works executed years before GST's introduction — it does not decide any GST-law question. The Central GST and Central Excise department was named only as a nominal, connected respondent; the direction is a bare 'decide within a time frame' mandamus with no examination of the petitioners' entitlement on merits.

Sections Involved

  • Finance Act, 1994 — the erstwhile service tax law under which the petitioners' liability for works-contract services during 2014–2018 arose.
  • Constitution of India, 1950 — Article 226, under which the writ petitions were filed.

Decision – In Favour of

Decided in favour of the petitioners to the extent of securing a time-bound direction — the Government was ordered to consider and decide their pending claim within 12 weeks, though no ruling was made on the actual entitlement to the amounts claimed.

Case Details

  • Court: Madurai Bench of the Madras High Court
  • Case No.: W.P.(MD) Nos. 21661 to 21663 of 2023
  • Coram: Justice S. Srimathy
  • Date of Order: 7 September 2023

Link to Download the Order

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