M/S. Saryug Gautam Construction Private Limited, Jharkhand Vs the Commissioner, Central GST and Ce Commissionerate, Rourkela

ORISSA HIGH COURT : CUTTACK

W.P.(C) No.20382 of 2025

In the matter of an Application under Articles 226 & 227 of the Constitution of India, 1950

M/s. Saryug Gautam Construction Private Limited A company incorporated under the Companies Act, 1956 having its place of business situated at MIG House No.:H1-165, Housing Colony Near Kadru More, P.O.: Harmu, P.S.: Argora Ranchi-834002 (Jharkhand) Through one of its Director Anil Kumar Singh, Aged about 61 years, Son of Late Saryug Singh, Resident of 70, West End Park, Old Sukhdev Nagar Thana Road, Hehal, P.O.: Hehal, P.S.: Sukhdeonagar, District: Ranchi Jharkhand-834005. … Petitioner

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-VERSUS-

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1. The Commissioner, Central Goods and Service Tax & Central Excise Commissionerate, Rourkela, KK-42, Civil Township, Rourkela-769004.

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Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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2. The Assistant Commissioner, Central Goods and Service Tax & Central Excise, Rourkela-I Division, Rourkela.

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3. The Superintendent, Central Goods and Service Tax & Central Excise, Rourkela-I Division, Rourkela. … Opposite Parties.

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Counsel appeared for the parties:

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For the Petitioner : M/s. Nitin Kumar Pasari, Nilamadhaba Rout and Sharmistha Dash, Advocates.

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For the Opposite Parties :

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Mr. Bismaya Ananda Prusty, Senior Standing Counsel.

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P R E S E N T:

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HONOURABLE CHIEF JUSTICE MR. HARISH TANDON

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AND

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HONOURABLE JUSTICE MR. MURAHARI SRI RAMAN

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Date of Hearing : 12.03.2026 :: Date of Order : 16.03.2026

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ORDER

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Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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The petitioner, a private limited company incorporated under the Companies Act, 1956 having its place of business in the State of Jharkhand, has challenged Order-in-Original dated 4^th July, 2024 (communicated to it on 15^th April, 2025) passed under Section 73 and 75 of the Finance Act, 1994 for the periods pertaining to the Financial Years 2015-16 and 2016-17 by the Commissioner, GST and Central Excise, Rourkela Commissionerate, Rourkela vide Annexure-7 and

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Demand- cum -Show-cause notices dated 23^rd April, 2021 and 30^th June, 2021 vide Annexure-4 under the provisions of the Finance Act, 1994 and the order dated 23^rd June, 2025 rejecting the petition for rectification, in this writ petition. The petitioner beseeches to invoke power of judicial review under Article 226 of the Constitution of India for grant of following reliefs:

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“In the aforesaid facts and circumstances, it is humbly prayed that Your Lordships may graciously be pleased to:

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a) Quash and set aside the impugned Adjudication Order dated 04.07.2024, bearing No.:2829/CCE/S.TAX/RKL/2024-25 issued from File: C.No.: V(15)/84/S.Tax/Adjn/Commr/RKL/2021 (DIN 20240762WK000000C4B1) (Annexure-7), passed by the respondent no.1 in purported exercise of powers under section 73 and section 75 of the Finance Act, 1994, for the Financial Year 2015-16 to Financial Year 2016-17 as the same is without jurisdiction and is being contrary to the settled principles of law;

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b) Quash and set aside the impugned Show Case notices dated 23.04.2021 (unserved) and 30.06.2021 bearing C.No.V(15)84/S.Tax/Adjn/ Commr/RKL/2021/5130A to 5132A and C.No.: V(15)203/S.Tax/Adjn/Commr/RKL/2021/7539A

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Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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542A respectively (Annexure-4), issued by the Respondent no.1 in purported exercise of powers under Section 74(1) of the Finance Act, 1994, for the Financial Year 2015-16 to Financial Tear 2016-17, as the same are without jurisdiction and is contrary to the settled principles of law;

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c) Quash and set aside the Rectification Order dated 23.06.2025, bearing C.No.:V(15)203/S.Tax/ Adjn/ Commr/RKL/2021/0096-A, passed by Respondent no.1, whereby without appreciating the facts of the case, the rectification petition has been rejected moreover, the demands have been confirmed against the petitioner.

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d) Pass any other order(s), direction(s) as this Hon’ble Court deem fit and proper in the facts and circumstances of the case and in the interest of justice.

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And for this act of kindness, the petitioner shall, as in duty bound, ever pray.”

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Facts:

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2. The facts as adumbrated by the petitioner in the writ petition reveals that during the period prior to introduction of Goods and Service Tax Act, 2017, the petitioner, a works contractor, while undertaking construction work, provided services to the Government/local authorities within the State of Bihar and State of Jharkhand and its turnover was exempted from point of taxation in view of Mega Exemption Notification No.25/2012-ST, dated 20^th June, 2012. However, it took out a Registration Certificate under the GST Act in the State of Odisha and the Registration Certificate was issued on 6^th January, 2019.

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Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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2.1. Being served with notices contemplating proceeding for adjudication to determine service tax liability under Chapter-V of the Finance Act, 1994 (for short, “the Act”) for the financial years 2014-15 to 2015-16 though replies were submitted on the basis of information received from the Central Board of Direct Taxes on the basis of disclosure made by the petitioner in the Income Tax returns and TDS deductions, an adjudication order vide Order-in-Original dated 4^th July, 2024 (received by the petitioner on 15.04.2025) under Sections 73 and 75 of Chapter-V of the Finance Act, 1994 has come to be passed.

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3. Sri Nitin Kumar Pasari, learned counsel appearing for the petitioner with the aforesaid facts submitted that the Commissioner, GST and Central Excise Commissionerate, Rourkela has transgressed his jurisdiction by levying service tax on the turnover, which is not amenable to service tax at all in the State of Odisha.

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3.1. He submitted that the petitioner was never executed any work inside the State of Odisha prior to 1^st July, 2017. Since the petitioner has never executed any work within the State of Odisha prior to 1^st July, 2017 and merely because it has been granted Registration Certificate on Signature Not VerifiedDigitally Signed 6^th January, 2019 specifying the date of liability “1^st Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge)Reason: Authentication July, 2017”, the demand raised in Order-in-Original Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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dated 4^th July, 2024 vide Annexure-7 is arbitrary, irrational and untenable in the eye of law.

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4. Sri Bismaya Ananda Prusty, learned Senior Standing Counsel appearing for the opposite parties submitted that the proceeding for determination of tax liability was initiated based on data received from the Central Board of Direct Taxes. Based on such data, the Adjudicating Authority acting on such information regarding works contract being executed and consideration money being received by the petitioner, proceeded to raise demand on premise that the petitioner did not choose to get registered notwithstanding liability.

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4.1. He referred to paragraphs-3.3 of Order-in-Original dated 4^th July, 2024, which reads as follows:-

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Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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“3.3. In this regard, the Noticee was issued with a letter vide C.No. IV (38) 510/TPD/UNREGD/DGARM/RKL-I/2021/1222-1260 dated 07.04.2021 by the Superintendent, CGST and Central Excise, Rourkela-I Division, Rourkela whereby the Noticee was asked to submit selfcertified copies of Balance Sheet and Profit and Loss Account for the relevant period, self-certified copy of 26-AS/TDS certificates & ITR for the relevant period and self-certified copies of relevant Work Orders/contract Agreements etc. However, observing no reply from the Noticee with respect to the aforesaid letter dated 07.04.2021, reminder letter bearing C.No.C.NO.IV(38)510/TPD/UN-REGD/ DGARM/RKL-I/2021/1397-1436 dated 16.04.2021

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was also issued. Still, the Noticee failed to respond with respect to the said letters and reminders sent by the department. Even after extending a fair chance of proving their contention; the Noticee failed not only to furnish the asked documents or any reply but also to put forth any claim of exemption/abatement or any documentary evidence on this score. The aforesaid act of Noticee clearly proves of itsmens-rea for evasion of government revenue. Therefore, in order to protect the government revenue, it is imperative on part of this office to raise the impugned Service Tax demand upon the Noticee under Section 73(1) of the Finance Act, 1994.”

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4.2. Since the petitioner did not respond and/or failed to furnish the documents sought for production before the Adjudicating Authority, there was no option left for the authority, but to quantify the tax liability based on the material available on record with respect to financial years 2015-16 and 2016-17. Therefore, he fervently prayed to dismiss the writ petition as the petitioner has not exercised alternative remedy provided under the Service Tax.

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5. Heard Sri Nitin Kumar Pasari, learned counsel appearing for the petitioner and Sri Bismaya Ananda Prusty, learned Senior Standing Counsel appearing for the opposite parties.

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Signature Not Verified

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Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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5.1. On the consent of counsel for the both the parties, the matter was taken up for final hearing on 12^th March, 2026 at the stage of “Fresh Admission”.

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5.2. Hearing being concluded on the said date, the matter was directed to be listed on 16^th March, 2026 “for Orders”. Today the matter being listed, this order has been passed.

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6. Perused the material available on record.

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Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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7. On bare reading of the Order-in-Original dated 4^th July, 2024 and demand- cum -show-cause notice dated 30^th June, 2021 reveals that the petitioner having failed to get registered under Section 69 of the Chapter-V of the Finance Act, 1994, the proceeding of determination of tax liability was initiated. As the petitioner did not appear before the authority concerned, the demand- cum- show cause notice was affirmed on the basis of the information received from the Income Tax Department with respect to consideration being received on account of service rendered with respect to execution of works contract. As is apparent from the record that the Adjudicating Authority has not made any independent inquiry based on the information received from the Income Tax Department. It is apparent from the Registration Certificate issued in Form GST REG-06 under the GST Act that the petitioner was granted such

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certificate on 6^th January, 2019 with date of liability fixed on 1^st July, 2017, i.e ., the date of introduction of the Goods and Services Tax Act.

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8. Since the adjudicating authority has failed to discharge his authority by independently inquiring as to whether the amounts treated to be consideration as per information received from the Income Tax Department were relatable to any work executed within the State of Odisha, this Court is of the view that the finding of fact recorded by the Adjudicating Authority against the petitioner is perverse.

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9. The petitioner by way of Supplementary Affidavit dated 27.01.2026 filed copy of Order dated 31.10.2025 passed by the Principal Commissioner, Central Goods and Services Tax and Central Excise, Ranchi. The recital of said Order runs as follows:

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Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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“4.3. *** The Principal Commissioner, GST and CX Commissionerate, Rourkela has adjudicated and confirmed the demand along with interest under Section 75 and penalty under Section 77(2) and 78 of the said Act. Hence, without going into the merit of the case, I do not find legal and proper to re-confirm the same amount of service tax for the same period of 2015-16 of the same noticee having same PAN number as it amounts to double taxation. Hence, I drop the demand raised in the impugned SCN for the period 2015-16.

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4.4. Further, as the demand of Service Tax itself has been found to be unsustainable and has been dropped on factual and legal grounds, the consequential demand of interest under Section 75 and penalty under Sections 77 and 78 of the said Act, also fails to stand. It is a settled principle that when the foundational tax demand is held to be invalid, any associated liability for interest and penalty automatically becomes untenable. In the instant case, as discussed in the preceding paras demands for the financial year 2014-15 are not sustainable on merit and demands for the financial year 2015-16 are also not sustainable as the said demands have already been covered in the adjudication order passed by the Principal Commissioner, Rourkela vide Order-in-Original No.28-29/CCE/S.Tax/RKL/2024-25 dated 04.07.2024.”

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Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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9.1. It is pointed out by the learned Counsel that another proceeding for adjudication for the period in question was initiated by the Commissioner, Central Tax (Audit), Patna vide Order dated 27.03.2024 and raised the demand of service tax against the petitioner. The learned counsel placed on record a copy of final order dated 9^th July, 2025 passed in Service Tax Appeal No.75991 of 2024 by the learned Customs, Excise and Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata (CESTAT). With respect to period 2016-17 to June, 2017 the learned Tribunal held in the case of the present petitioner that “As the Show Cause Notice to the

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appellant has been issued to the appellant on 12.10.2021 by invoking extended period of limitation for the period 2016-17 to June, 2017 as whole of the period is beyond the normal period of limitation, therefore, no demand is sustainable against the appellant” .

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9.2. It is also brought to our notice that the petitioner has filed an application for rectification of order dated 4^th July, 2024 under Section 74 of the Finance Act, which has come to be rejected on 23^rd June, 2025 by the Commissioner, GST and CX Commissionerate, Rourkela.

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10. From the above narration of factual position, as it is ex facie discernible that the turnover/consideration stated to have been received with respect to works executed has been deleted from the purview of adjudication by the Principal Commissioner at Ranchi, because in the impugned Order-in-Original dated 04.07.2024 (Annexure-7) the said turnover has been assessed and the consideration thereof has been made subject to levy of service tax. Furthermore, the learned Tribunal has set aside the demand of service tax raised for the period 2016-17 to June, 2017 relating to State of Bihar on the ground of limitation.

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10.1. It is emphasised in the writ petition that Letters dated Signature Not 07.04.2021 and 16.04.2021 were issued by the Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Respondent No.3 seeking relevant documents from the Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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Petitioner. However, in absence of any reply to the aforesaid letters, a Show Cause Notice dated 26.04.2021 bearing C.No.V(15)203/S.Tax/Adjn/Commr/RKL/2021/ 5130AA to 5132A was issued upon the Petitioner for the Financial Year 2015-16, which is claimed not to have served upon the petitioner. The Department proceeded to issue another Show Cause Notice dated 30.06.2021, bearing C.No.V(15)203/S.Tax/Adjn/Commr/RKL/2021/ 7539A to 7542A upon the petitioner for the Financial Year 2016-17 which was received by the petitioner via e- mail on 02.07.2021. It is submitted by the learned counsel that at this point of time only the petitioner came to know that a separate adjudication proceeding had been initiated by the opposite party-Authority.

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10.2. Nonetheless having cursory glance at the impugned Order-in-Original dated 04.07.2024 it is observed that the demand has been raised in the Rourkela Commissionerate since the petitioner did not appear before the Adjudicating Authority with material document(s) to show that it was not exigible to service tax in the State of Odisha; as a result of which the consideration stated to have been disclosed to the Income Tax Department has been assessed as reflected in the impugned Order-in-Original.

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Signature Not Verified

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Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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10.3. It is also perceived that the petitioner had also no occasion to cite the order of the Principal Commissioner

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at Ranchi and the learned Tribunal which have come to exist after the impugned order is passed. The claim of the petitioner that its activity attracted exemption by virtue of Notification No.25/2012-ST, dated 20^th June, 2012. Under such premise, this Court is persuaded to conceive that the petitioner had no proper opportunity to justify its claim for exemption as also raise point of limitation. In view of inadequate opportunity, this Court feels it expedient to set aside the Order-in-Original dated 04.07.2024 (Annexure-7) as also the Order dated 23.06.2025 rejecting the application for rectification of said Adjudication Order.

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10.4. The petitioner is entitled to one opportunity to furnish documents including the material furnished before this Court for the first time. Though alternative remedy exists to question the veracity of the determination of tax liability made in the Order-in-Original dated 04.07.2024, as the petitioner pleads violation of principles of natural justice for want of service of one of the notices and in adequate opportunity to present his matter before the Adjudicating Authority, in view of Tin Box Co. Vrs. CIT, (2001) 9 SCC 725, this writ petition is entertained in order to grant an opportunity to the petitioner to present its case.

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Signature Not Verified

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Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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10.5. It may be relevant to quote from the decision of the Hon’ble Supreme Court rendered in the case of Tin Box Co. Vrs. CIT, (2001) 9 SCC 725:

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“1. It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact-finding authority, that reads thus:

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“We will straight away agree with the assessee’s submission that the ITO had not given to the assessee proper opportunity of being heard.’

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2. That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of setting out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard.”

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Signature Not Verified

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Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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10.6. In the above view of the matter, this Court feels it apposite that the petitioner is required to be given one opportunity to place evidence including those placed before this Court before the Adjudicating Authority in the State of Odisha. For this purpose the Order-inOriginal dated 04.07.2024 (stated to have been received by the petitioner on 15.04.2025) passed by the Commissioner, GST & CX Commissionerate, Rourkela

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Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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(Annexure-7) along with the Order dated 23.06.2025 rejecting the application for rectification is set aside. Interest of justice shall be best subserved if the Adjudicating Authority shall pass order afresh by affording opportunity to the petitioner to establish that if demand in State of Odisha is allowed to stand would tantamount to double taxation. This apart, the petitioner is at liberty to demonstrate that its turnover would fall within the ambit of Mega Exemption Notification. Furthermore, it is available for it to show that the adjudication process as initiated is barred by time. In order to avail such opportunity, the petitioner is directed to appear before the said Authority on or before 6^th of April, 2026 along with copy of this order. On such appearance, the said Authority may examine the material placed before him by the petitioner or defer the proceeding to such other date as he deems suitable. Needless to say that unnecessary adjournment shall not be granted to the petitioner and the petitioner is directed to extend all cooperation during the course of proceeding. The entire exercise of adjudication process is directed to be completed within a period of six weeks from the date of receipt of copy of this order. After passing Adjudication Order, the same is required to be communicated to the petitioner forthwith. It deserves no mention that it is open to the petitioner to raise plea/ ground as is available under law.

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11. With the aforesaid observations and directions, this writ petition is disposed of and pending interlocutory application(s), if any, is disposed of accordingly, but in the circumstances, there shall be no order as to costs.

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(HARISH TANDON) CHIEF JUSTICE

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(MURAHARI SRI RAMAN) JUDGE

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Signature Not Verified

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Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: Personal Assistant (Secretary-in-charge) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 16-Mar-2026 18:31:45

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High Court of Orissa, Cuttack The 16th March, 2026//Aswini/Laxmikant

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M/S. Saryug Gautam Construction Private Limited, Jharkhand v. the Commissioner, Central GST and Ce Commissionerate, Rourkela

Case brief

What is this about?

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M/S. Saryug Gautam Construction Private Limited, Jharkhand v. the Commissioner, Central GST and Ce Commissionerate, Rourkela

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

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