Rajeev Ranjan Prasad, J. – In this writ application, the petitioner has prayed for the following reliefs: –

“i. For the issuance of appropriate writ/writs, order/orders, direction/directions in the nature of certiorari to quash the Demand cum show cause notice bearing no. C.No. V(44)01/SCN/Pur.Div/Anil Kumar Singh/2022/506 dated 19.04.2022 (Annexure P/2) issued by the Respondent Assistant Commissioner whereby and where under the Petitioner was asked to file show cause as to why the Service Tax of Rs. 3,05,794 /-(Rupees Three Lakh Five Thousand Seven hundred ninety four only) on the amount of Rs. 20,38,629/- deducted as Royalty by the Government of Bihar from the Petitioner's Bills in the financial year 2016-17 should not be demanded and recovered along with the applicable rate of interest and applicable penalties under the provisions of Finance Act, 1994 read with the Section 174 of the Central Goods and Service Tax Act, 2017.

ii. For the issuance of appropriate writ/writs, order/orders, direction/directions in the nature of Certiorari to quash the order no. 01/2023-24/ST/AC/PURNEA dated 31.10.2023 (Annexure P/4) passed by the Respondent Assistant Commissioner confirming its aforesaid demand cum show cause notice dated 19.04.2022.

iii. For any other relief/reliefs that in the facts and circumstances of the case would do complete justice to the Petitioner.”

Brief Facts of the Case

2. It is the case of the petitioner that the petitioner is a Government Contractor, engaged in the construction and maintenance of roads and also in construction of buildings such as Panchayat Bhawan etc. in the district of Katihar.

3. The petitioner had purchased sand, soil, chips, bitumen, bricks etc. directly from the market for the use in the said works. No good has been supplied by the Government for use in the execution of the works contract. The petitioner does not hold any mining lease from the State Government or any other authority.

4. It is stated that the respondent-Government, Deparment has deducted a sum of Rs.20,38,629/- as royalty from the petitioner’s bills during the period 2016-17. Payment certificates issued by the respondent Executive Engineers clearly show that the royalty amount was deducted from the petitioner’s bill.

5. The petitioner is challenging a demand-cum-show cause notice and demand order issued by the Assistant Commissioner, CGST & CX, Purnea Division (respondent no. 2). A copy of the demand-cum-show cause notice has been brought on record as Annexure ‘P/2’ to the writ application.

6. From the Annexure ‘P/2’, it appears that as per data sharing policy of Government of India, Income Tax Department appraised CGST & CX Officer that this petitioner is a service provider and has received Rs.5,86,23,015/- during the financial year 2016-17 from their different parties. The Income Tax Department indicated that there may have been evasion of service tax on the part of the said noticee, therefore, a verification process was initiated by the Service Tax Department i.e. CGST & CX, Range Katihar and the Superintendent of Central GGST, Range Katihar vide his letters dated 13.04.2021, 06.08.2021 and 23.08.2021. The respondent authorities requested the petitioner to furnish his reply/ certain documents/ records and information. In response, the petitioner submitted his reply letter dated 23.09.2021 along with certain documents and submitted that service rendered by them during the period 2016-17 were exempted from service tax.

7. The submission of the petitioner has been examined by the Department and it was found that the petitioner being a Government Contractor was engaged in construction and maintenance of road etc. therefore, his activity would be covered under Mega Exemption Notification No. 25/2012-ST dated 20.06.2012. In such circumstance, no service tax is leviable on the said activity but upon perusal of the payment certificates issued by the Government bodies and/or audited balancesheet of the financial year 2016-17, it was revealed