Writ interference at show cause stage refused where service tax exemption depended on disputed contractual facts and documents.

Where exemption from service tax depends on disputed contractual facts, including the true nature of cleaning and solid waste management services and whether the work falls within the claimed notification, the High Court will ordinarily decline writ interference at the show cause notice stage. The Court held that the issue required examination of the work order and supporting documents to determine the exact service rendered and the applicability of the exemption, so the notice was not quashed. The petitioner was directed to file a reply and pursue adjudication before the statutory authority.

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Issues: (i) Whether the show cause notice seeking service tax on cleaning and solid waste management services could be quashed in writ jurisdiction on the footing that the activity was exempt under the relevant exemption notification. (ii) Whether the matter should be examined by the Authority on the basis of the work order and supporting documents, rather than being decided at the notice stage.

Issue (i): Whether the show cause notice seeking service tax on cleaning and solid waste management services could be quashed in writ jurisdiction on the footing that the activity was exempt under the relevant exemption notification.

Analysis: The dispute turned on the true nature of the contractual work, including whether the supply of manpower, auto tippers, and garbage collection obligations formed part of solid waste management so as to fall within the claimed exemption. The question also required consideration of the scope and application of the exemption notification relied upon, including whether the service rendered to the local authority remained exempt.

Conclusion: The issue was not decided in favour of the petitioner at the writ stage.

Issue (ii): Whether the matter should be examined by the Authority on the basis of the work order and supporting documents, rather than being decided at the notice stage.

Analysis: The Court found that the controversy required factual appreciation of the work order and detailed examination of the documents to determine the exact service rendered and the applicability of the exemption. Such an inquiry was held to be inappropriate for resolution in writ proceedings at the stage of a show cause notice.

Conclusion: The matter was remitted to the Authority for adjudication after reply and supporting documents were filed.

Final Conclusion: The writ petition did not result in quashing of the notice, and the petitioner was required to pursue the statutory reply and adjudicatory process before the Authority.

Ratio Decidendi: When the applicability of an exemption depends on disputed contractual facts and the true nature of the services rendered, the High Court should ordinarily decline interference at the show cause notice stage and permit the statutory authority to decide the matter on evidence.

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