2025:KER:28434 W.P.(C). No.39617 of 2022 : 1 : IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE VIJU ABRAHAM THURSDAY, THE 3RD DAY OF APRIL 2025 / 13TH CHAITHRA, 1947 WP(C) NO. 39617 OF 2022 PETITIONER ROY JACOB, AGED 56 YEARS THATTARAKUNNEL ENTERPRISES, ROOM NO. 5, THEKKENATH BUILDING, KADAVANTHARA, KOCHI-682020 BY ADV RAMESH CHERIAN JOHN RESPONDENT/S: 1 THE DEPUTY COMMISSIONER, OFFICE OF THE DEPUTY COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE, ERNAKULAM DIVISION, CENTRAL EXCISE BHAVAN, KATHRIKADAVU, KALOOR, KOCHI, PIN - 682017 2 THE COMMISSIONER (APPEALS), OFFICE OF THE COMMISSIONER (APPEALS), CENTRAL TAX, CENTRAL EXCISE & CUSTOMS, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI, PIN - 682018 BY ADV R.HARISHANKAR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03.04.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2025:KER:28434 W.P.(C). No.39617 of 2022 : 2 : VIJU ABRAHAM, J. - - - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No.39617 of 2022 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 3rd day of April, 2025 JUDGMENT The petitioner has approached this Court challenging Exts.P3 and P9 orders. Ext.P3 is the order of assessment for the years October 2011 to March 2015, which was completed on 16.01.2018. Though an appeal was preferred with a petition to condone the delay, the application seeking condonation of delay was dismissed as per Ext.P9, holding that the delay cannot be condoned beyond the statutory period of 90 days as the appeal has been preferred beyond the statutory period. 2. The specific case of the petitioner is that he was engaged in the construction and sale of residential apartments and he has stopped his business from the year 2015 due to serious loss in the business and he has been detected with cancer and is undergoing treatment as evident from Ext.P1. Due to the strong dosage and potency of the medicines taken for cancer and consequent dizziness, he had a fall from the terrace of his residence which 2025:KER:28434 W.P.(C). No.39617 of 2022 : 3 : resulted in multiple fractures and he is now totally immobile, as evident from Ext.P2 discharge summary. The petitioner submits that for the period from 10/2011 to 03/2015 the adjudicating authority completed the assessment as per Ext.P3 assessment order. The learned counsel appearing for the petitioner would submit that going by Rule 2A of the Service Tax(Determination of Values) Rules, 2006(in short 'the Rules, 2006') the 1st respondent was duty bound to allow the permissible deductions namely, the amount charged for the Goods & Services and VAT levied thereon. The learned counsel would further submit that Going by Rule 2A(i) of the Rules, 2006, the value of service portion in the execution of works contract shall be equivalent to the gross amount charged for the “Works Contract” less the value of property in goods transferred in the execution of the said works contract. But the 1st respondent adopted the gross amount shown in the VAT return and determined the tax without allowing the permissible deductions and therefore, the levy of service tax on the gross amount as per VAT returns is wholly illegal, arbitrary and without authority of law. It is further contended that as per Ext.P4 notification No.30/2012 issued by the Ministry of Finance, Department of 2025:KER:28434 W.P.(C). No.39617 of 2022 : 4 : Revenue, Government of India, for execution of “Works Contract”, the percentage of service tax payable by the person providing service namely the petitioner is only 50%. In total violation of Ext.P4 notification, 100% tax has been made payable by the petitioner and therefore, on the basis of the same it is contended that Ext.P3 order of assessment is bad in law. 3. The respondents have filed a detailed counter affidavit and on the basis of the same the learned Standing Counsel appearing for the respondents submits that the assessment made as per Ext.P3 is perfectly legal and valid. As regards the contention raised by the petitioner relying on Rule 2A of the Rule, 2006, it is the contention of the learned Standing Counsel that the department has given the abatement applicable to the services provided by the assessee, as per the provisions of the Act and therefore, the contention of the petitioner in this regard is without any basis. It is further contended that the appeal has been filed beyond the period of limitation and therefore, it is rightly rejected as per Ext.P9. It is also contended that Ext.P9 is an appealable order as per Section 86(1) of the Finance Act, 1994 before CESTAT. 4. When the matter came up for consideration on 16.12.2022 2025:KER:28434 W.P.(C). No.39617 of 2022 : 5 : this Court has taken note of the fact that the appeal was filed beyond the maximum condonable period, but taking into consideration the contention of the learned counsel for the petitioner that he has been assessed towards works contract service by treating the entire amounts received by him as assessable to service tax under the provisions of the Finance Act, 1994 and that at least a portion of that amount is clearly not assessable to service tax as part of the amount represents the amount paid by the petitioner towards purchase of material which was subjected to tax on sale of goods (KVAT) which was applicable at the relevant time, prima facie entered a finding that this is a jurisdictional issue and therefore the court was bound to examine the correctness of the original order under Article 226 of the Constitution of India and admitted the matter and granted interim order staying Ext.P3 order. 5. The specific contention raised by the petitioner is that the deduction available to the petitioner as per 2A(i) of the Rules, 2006 has not been extended to the petitioner. Though in the counter affidavit the stand of the department is that whatever abatement applicable to the services provided by the assessee has given due 2025:KER:28434 W.P.(C). No.39617 of 2022 : 6 : credit to as per the provisions of the Act and therefore, the contention of the petitioner is without any basis, the learned counsel for the petitioner pointed out that, even in Ext.R1(b) inspection report of CERA it is specifically found that the VCES request made by the petitioner was rejected on the ground of non- payment of dues within the stipulated time and on the basis of the same it is contended that the stand in the counter affidavit that whatever benefits of abatement applicable to the service provided by the assessee as per the Act has been extended to the petitioner is without any basis. 6. Yet another aspect to be noted is that the petitioner was detected with cancer and he was undergoing treatment and due to strong dosage and potency of the medicines taken for cancer and consequent dizziness he had a fall from the terrace of his residence which resulted in multiple fractures. The health issues of the petitioner was stated as reasons for the delay in filing the appeal. It is also to be noted that though a specific contention was taken by the petitioner that he is entitled for the benefit of Ext.P4 notification, no answer has been given in the counter affidavit filed by the respondents regarding the same. 2025:KER:28434 W.P.(C). No.39617 of 2022 : 7 : 7. Taking into consideration all these aspects, I am of the view that the matter requires reconsideration by the 1st respondent assessing authority. To facilitate reconsideration, Exts.P3 and P9 are set aside. The 1st respondent shall reconsider the matter and issue a fresh order of assessment, after affording an opportunity of being heard to the petitioner and after considering the contention of the petitioner that he is entitled for the permissible deduction as provided under Rule 2A of the Service Tax(Determination of Values) Rule, 2006 and also to the benefit of Ext.P4 notification No.30/2012 of the Ministry of Finance, Department of Revenue, Government of India as amended from time to time. Fresh orders of assessment shall be passed within an outer limit of 3 months from the date of receipt of a copy of this judgment. The writ petition is disposed of as above. Sd/- VIJU ABRAHAM JUDGE sm/ 2025:KER:28434 W.P.(C). No.39617 of 2022 : 8 : APPENDIX OF WP(C) 39617/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE DISCHARGE SUMMARY AND TREATMENT PARTICULARS OF THE PETITIONER ISSUED BY AMRITA INSTITUTE OF MEDICAL SCIENCES AND RESEARCH CENTER, KOCHI ON 22.02.2021 Exhibit P2 TRUE COPY OF THE DISCHARGE SUMMARY ISSUED TO THE PETITIONER BY MEDICAL TRUST HOSPITAL, KOCHI ON 30.07.2022 Exhibit P3 TRUE COPY OF THE ORDER-IN ORIGINAL NO. 07/2018-ST DATED 16.01.2018 Exhibit P4 TRUE COPY OF THE SAID NOTIFICATION NO. 30/2012 DATED 20.06.2012 Exhibit P5 TRUE COPY OF THE FORM OF APPEAL ALONG WITH STATEMENT OF FACTS AND GROUND OF APPEAL DATED 06.12.2018 WITHOUT THE ANNEXURES Exhibit P6 TRUE COPY OF THE AFFIDAVIT DATED 06.12.2018 Exhibit P6(a) TRUE COPY OF THE MEDICAL CERTIFICATE DATED 08.11.2018 Exhibit P6(B) TRUE COPY OF THE MEDICAL CERTIFICATE DATED 21.11.2018 Exhibit P6(c) TRUE COPY OF THE PETITION FOR CONDONATION OF DELAY DATED 06.12.2018 Exhibit P7 TRUE COPY OF THE EMAIL COMMUNICATION ISSUED ON 19.10.2022 2025:KER:28434 W.P.(C). No.39617 of 2022 : 9 : Exhibit P8 TRUE COPY OF THE COVERING LETTER DATED 11.11.2022 ALONG WITH THE WRITTEN SUBMISSION IN SUPPORT OF CONDONATION OF DELAY AND ON THE MERITS OF THE CASE WITHOUT THE ANNEXURES MENTIONED THEREIN DULY ACKNOWLEDGED BY THE OFFICE OF THE 2ND RESPONDENT Exhibit P9 TRUE COPY OF THE ORDER-IN-APPEAL NO. COC- EXCUS-000-APP-347-2022 DATED 02.11.2022 Exhibit P10 TRUE COPY OF THE REPRESENTATION DATED 24.11.2022 FILED BEFORE THE 1ST RESPONDENT ALONG WITH THE ACKNOWLEDGEMENT. RESPONDENT EXHIBITS Exhibit R1(a) True copy of reply dated 23.05.2017 to show cause noticed No.12/2017-ST dated 23.03.2017 Exhibit R1(b) True copy of inspection report No.CERA(HQ)/2-5/ST/CHN/2015-16 dated 01.07.2015 of CERA