HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON’BLE SHRI JUSTICE ANIL KUMAR JUKANTI WRIT PETITION No.3287 of 2014 DATE OF ORDER : 07.01.2026 Between M/s. Patel Engineering Limited ... petitioner And The Government of Andhra Pradesh Rep by its Principal Secretary to Govt (AD), I& CAD Department, ‘J’ Block, A.P. Secretariat, Hyderabad and 9 others …respondents

O R D E R:

This Writ Petition is filed with the following prayer:

“…to issue a Writ, Order or direction more particularly in the nature of Writ of mandamus directing the respondent to pay the said liabilities on account of service tax, interest and penalty as given in the order NO-18/2011-Adjn (S.T) (Commr), dated 21.9.2011 as finalised by the appellate authorities directly to the Service Tax Department, thus relieving the petitioner of any liability for the Service Tax under the contracts with the Respondents…”

2. Heard Mr. P.Sri Ram, learned counsel for petitioner, learned Assistant Government Pleader for Irrigation and Command Area Development for respondent Nos.1 to 8, Mr. Dominic Fernandez, learned counsel for Central Excise appearing for respondent No.9 and Mr. Swaroop Oorilla, learned Special Government Pleader for State Tax appearing for respondent No.10.

3. Petitioner is a registered company under Companies Act, engaged in the business of construction/execution of infrastructure projects, registered for “Works Contract Service” and “Commercial or Industrial Construction Services”, amongst other services, vide STC No.AAACP2567LS005. Contracts were awarded for construction of various lift irrigation projects including canal etc., modernization and maintenance of delta system. Petitioner was issued a show cause notice dated 12.04.2010 by Commissioner of Central Excise, Customs and Service Tax, calling upon as to why petitioner should not be held liable to pay an amount of Rs.32,81,59,014/- towards service tax in respect of service in form of works contract with interest and penalties. A reply is filed on 03.08.2010 to the show cause notice. Commissioner passed an order dated 21.09.2011 negating all the objections offered by the petitioner on the ground that they are not in accordance with law and confirmed the demand.

4. It is submitted by learned counsel for petitioner that petitioner did not collect the tax amounts from the recipient of service. It is further submitted that even assuming that if service tax is payable, it should be paid by recipient of services and the same has not been collected. That Government of Andhra Pradesh is the recipient of the service, petitioner would have affected the payment by collecting from the Government of Andhra Pradesh. It is also submitted that since petitioner and respondent No.1 were of the view that service tax was not applicable to the works, petitioner had no occasion to collect the same from the service recipient. It is submitted that Government, being the recipient of the services, has to pay the same. That it is only an obligation upon petitioner to collect or receive and pass the same to Service Tax Department. It is pointed out that under the agreement, respondent No.1 agreed to absorb the variation in taxes. That the respondents have not taken action for releasing the amount and if there is a delay in releasing the amounts, it would cause irreparable loss to the petitioner.

5. Learned Assistant Government Pleader for Irrigation and Command Area Development has placed on record instructions received from the office of Superintending Engineer, Irrigation Circle, Gadwal. The relevant portion of the instructions is as follows:

“7) It is relevant to submit that, the petitioner filed CEA No.48 of 2013 and the Hon'ble High court on 22.11.2013 while admitting the appeal passed Interim orders on CEAMP No:107/2013 with a direction that the appeal before the tribunal should be kept on record and should not be dismissed till the hearing of the appeal. The petitioner after receiving the letters and summons from commission