High Court quashes Service Tax exemption denial for partnership firm due to duplicate Assessment Orders

The High Court quashed the Order-in-Original dated 24th May, 2022, concerning a partnership firm's exemption claim under Mega Exemption Notification No.25/2012- Service Tax for the Financial Year 2014-15. The court noted the impermissible nature of having two Assessment Orders for the same period, especially when the initial order was under appeal. The duplication led to the stay of the second order, which was subsequently admitted as an inadvertent error by the Senior Standing Counsel for Central GST. As a result, the High Court allowed the petitioner's writ petition, quashing the challenged order.

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Issues:
Challenge to Order-in-Original dated 24th May, 2022 under Article 226/227 of the Constitution of India; Exemption under Mega Exemption Notification No.25/2012- Service Tax; Jurisdiction of Adjudicating Authority; Double Assessment Orders for the same Financial Year 2014-15.

Analysis:
The petitioner, a partnership firm engaged in civil works and manpower services, challenged the Order-in-Original dated 24th May, 2022, passed by the Assistant Commissioner of GST & Central Excise. The petitioner claimed exemption under Mega Exemption Notification No.25/2012- Service Tax for the work done during the Financial Year 2014-15. The Adjudicating Authority imposed a demand of Rs.26,37,369/- under Section 73, along with penalties under Sections 77(1)(c)(ii), 77(1)(a), 70, and 78 of the Finance Act, 1994. The petitioner had already filed an appeal against the initial order, and while it was pending, a second order was issued by the same authority on 24th May, 2022, raising similar demands and penalties for the same period.

The petitioner contended that having two Assessment Orders for the same Financial Year was impermissible, especially when the first order was already sub judice before the Appellate Authority. The High Court, upon hearing the matter, noted the duplication of orders and stayed the operation of the second order dated 24th May, 2022. The Senior Standing Counsel for Central GST admitted the inadvertence in passing the second order and agreed to its quashing.

Consequently, the High Court, considering the fair submission, quashed the Order-in-Original dated 24th May, 2022, pertaining to the Financial Year 2014-15. The writ petition filed by the petitioner was allowed, and an urgent certified copy of the order was directed to be issued as per rules.

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