Facts of the Case

The petitioner, Uppari Krishna Murthy, challenged an Order-in-Original dated 28.03.2023 passed by the Commissioner of Indirect Taxes and Customs, Hyderabad Audit-I Commissionerate, which confirmed a Service Tax demand of Rs. 2,10,20,610 against him for the period 2016-17 and 2017-18, along with an equal amount of penalty, under the proviso to Section 73(1) of the Finance Act, 1994. The petitioner's case, as recorded in the petition, was that he operated as a special-class contractor registered with the Telangana Government executing works contracts for the State, and that services rendered by him were exempt from service tax under specified notifications. Note: the underlying court order text available for this case was extracted from a poorly-scanned copy and portions are garbled; this summary relies on what is legibly recoverable — the demand year (2016-17/2017-18) and the invocation of the Finance Act, 1994 (the pre-GST service tax law) confirm this is not a GST-law dispute, since service tax under the Finance Act, 1994 was subsumed into GST only from 1 July 2017 and this demand relates substantially to the pre-GST period.

Issues Involved

  1. Whether the Order-in-Original dated 28.03.2023, confirming a Service Tax demand of Rs. 2,10,20,610 with equal penalty, was legally sustainable.
  2. Whether the services rendered by the petitioner as a works contractor for the State Government were exempt from service tax under the applicable exemption notifications.

Petitioner's Arguments

  • Contended that the demand was arbitrary, illegal, unconstitutional and without jurisdiction, and in violation of Chapter V of the Finance Act, 1994 and related government circulars/notifications.
  • Relied on exemption Notification No. 13/2007-Service Tax dated 06.07.2007 and Notification No. 25/2012-Service Tax dated 20.06.2012, along with Circular No. 116/16/2011-Service Tax, to argue that services rendered to the State Government as a works contractor were exempt from service tax.

Respondent's Arguments

  • Represented through the Deputy Solicitor General of India for the Union and Government Pleader/counsel for the tax department respondents; the specific counter-arguments are not clearly legible in the available order text.

Court Order / Findings

  • The Court's operative order records: 'Allowing the writ petition without costs.'
  • Given the degraded quality of the scanned order, the detailed reasoning behind the allowance is not fully legible in the extracted text.

Important Clarification

This is a pre-GST Service Tax matter under the Finance Act, 1994, concerning demand years 2016-17 and 2017-18 — it is not a GST law ruling, even though the tax department involved is now organisationally styled as handling 'Customs and GST'. Readers should also note that the source document available for this summary was of degraded scan quality; while the case caption, demand amount, and final outcome (writ petition allowed) are clear, the Court's detailed reasoning could not be reliably reconstructed from the available text, and this post does not attempt to fill that gap with invented reasoning.

Sections Involved

  • Finance Act, 1994 — Chapter V (Service Tax) and Section 73(1) proviso (extended period demand)
  • Notification No. 13/2007-Service Tax, dated 06.07.2007 — exemption notification relied upon
  • Notification No. 25/2012-Service Tax, dated 20.06.2012 — mega exemption notification relied upon
  • Article 226, Constitution of India — writ jurisdiction

Decision – In Favour of

The petitioner (Uppari Krishna Murthy) — writ petition allowed without costs; the Service Tax demand order dated 28.03.2023 was set aside, though the detailed reasoning is not fully legible from the available record.

Case Details

High Court for the State of Telangana at Hyderabad; Writ Petition No. 17207 of 2023; Coram: The Hon'ble The Chief Justice Ujjal Bhuyan and The Hon'ble Sri Justice N. Tukaramji; Date of Order: 06.07.2023.

Link to Download the Order

Click here to view/download the full order

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