Procedural fairness in service tax assessment required notice and documents before rejecting exemption for government works.

Service tax exemption for construction work executed for government bodies was refused without first putting the assessee on notice to produce the relevant work agreements and payment certificates. Because the assessment relied on missing documents reflected in Form 26AS, the procedure was found unfair and the exemption claim could not be examined on an incomplete record. Fresh notice and consideration of the supporting materials were required before deciding taxability and penalty. The impugned order was set aside and the matter remanded for de novo adjudication, with a fresh show cause notice, reply, documents and a speaking order.

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Issues: Whether the impugned order imposing service tax and penalty on the petitioner for government works could be sustained when the adjudicating authority proceeded without calling for work agreements and payment certificates and whether the matter required remand for fresh adjudication.

Analysis: The dispute turned on the petitioner's claim for exemption from service tax in respect of construction work executed for government bodies. The impugned order disallowed the claim largely because the petitioner had not furnished work agreements and payment certificates for several entries reflected in Form 26AS. Since the record did not show that the petitioner was first put to notice to produce those specific documents before the order was passed, the assessment was found to be procedurally unfair. In such circumstances, a fresh notice calling for the relevant agreements and payment certificates was considered necessary so that the exemption claim could be examined on complete materials.

Conclusion: The impugned order was set aside and the matter was remanded to the competent authority for issuance of a fresh show cause notice, receipt of the petitioner's reply and documents, and a fresh speaking order. The petitioner succeeded to that extent.

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