Court orders refund of service tax deducted by Housing Board, contractors exempt, no interest granted

The High Court of Punjab and Haryana granted a Mandamus for the refund of service tax deducted by the Housing Board, directing the contractor to file a fresh refund application. The court noted contractors were exempt from paying service tax for construction projects. The Housing Board's deduction was sanctioned for refund, and the court declined the plea for interest due to cooperative settlement efforts by Tax Authorities. All petitions were disposed of as infructuous, concluding the case.

---

---

Issues involved:
Seeking Mandamus for refund of service tax with compound interest, rejection of refund application, filing of writ petition without approaching the Tribunal, modification of the order directing the Housing Board to claim refund, final settlement of the claim, and the plea for interest.

Analysis:
The judgment by the High Court of Punjab and Haryana addressed three writ petitions seeking a Mandamus for the refund of service tax deducted by the Housing Board, Haryana from the bills of the petitioner-contractor. The court noted that a previous judgment had clarified that contractors were not liable to pay service tax for construction projects under a specific exemption notification. Despite the rejection of the refund application by the tax authorities, the petitioners directly filed writ petitions without approaching the Tribunal, leading to the current proceedings.

The court initially directed the Housing Board to file a refund application upon verification by the Union of India. Subsequently, the Union of India sought modification of the order, stating that it should be the contractor, not the Housing Board, to claim the refund. The court accepted this modification, requiring the contractor to file a fresh application for refund within three weeks, to be processed within a month by the authorities.

During the resumed hearing, it was revealed that the total amount deducted by the Housing Board had been sanctioned for refund to the petitioner-firm. The court, while acknowledging the petitioner's right to claim interest, declined to entertain the plea in writ jurisdiction due to the circumstances of the case and the cooperative approach of the Tax Authorities in settling the claim. Consequently, all petitions were disposed of as infructuous, bringing the matter to a close.

---