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of <h1>Court rules deductions of service tax unjustified, orders release of pending payments to petitioner.</h1> <h3>Metrro Waste Handling Pvt. Ltd. Versus South Delhi Municipal Corporation</h3> Metrro Waste Handling Pvt. Ltd. Versus South Delhi Municipal Corporation - 2020 (38) G. S. T. L. 438 (Del.) Issues Involved:1. Legality of the deduction of service tax amounts by the respondent.2. Applicability of service tax on the services provided by the petitioner.3. Maintainability of the writ petition for recovery of money.Issue-wise Detailed Analysis:1. Legality of the deduction of service tax amounts by the respondent:The petitioner contested the respondent's action of deducting service tax amounts from the consideration payable, arguing that the services provided were exempt from service tax under Section 93 of the Finance Act, 1994. The respondent, however, claimed that the agreed rate of Rs. 1934/- per day per vehicle was inclusive of service tax. The court examined the work order and agreement, which stipulated that the rate was all-inclusive, covering various charges including service tax. The court concluded that the agreed rate did not vary based on changes in service tax, and the respondent's deductions were unjustified. The court noted that the audit objection, which prompted the deductions, misinterpreted the terms of the agreement.2. Applicability of service tax on the services provided by the petitioner:The petitioner argued that the services of waste collection provided to the respondent were not taxable under Section 66 of the Finance Act, 1994, and were specifically exempted by Notification No. 12/2012. The court found that the services were indeed exempt from service tax when the tender was floated and the agreement was executed. The court observed that the respondent's internal calculations mistakenly included a service tax component, leading to an unwarranted deduction. The court emphasized that the agreed rate was understood by both parties to be all-inclusive, without a separate service tax component.3. Maintainability of the writ petition for recovery of money:The respondent argued that the writ petition was not maintainable and that the petitioner should have filed a civil suit for recovery. The court referred to several judgments, including Godavari Sugar Mills Ltd. v. State of Maharashtra and Ors., which clarified that a writ petition for refund can be entertained if the collection of money was without authority of law. The court held that the facts of the case warranted the exercise of its power to direct the respondent to release the withheld amounts, as the deductions were made without legal justification.Conclusion:The court concluded that the respondent acted illegally and arbitrarily in withholding payments on the ground of non-payment of service tax. A writ was issued directing the respondent to release all pending payments to the petitioner within two months. The petition was disposed of, and all pending applications were also disposed of.
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