1 APHC010577072024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3529] TUESDAY,THE TWENTY FOURTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION NO: 30783/2024 Between: 1. ADINARAYANA BOBBADI, S/O. LATE TAVITI NAIDU AGED ABOUT 48 YEARS R/O. 1/2, VENTATAPURAM POST, PEDDALINGALAVALASA SRIKAKULAM ...PETITIONER AND 1. SUPERINTENDENT OF CENTRAL TAX, TECHNICAL SECTION, VIZIANAGARAM CGST DIVISION VIZIANAGARAM, ANDLIRA PRADESH 2. DEPUTY COMMISSIONER OF CENTRAL TAX, VIZIANAGARAM CGST DIVISION, VIZIANAGARAM, ANDHRA PRADESH 3. ASSISTANT COMMISSIONER OF CENTRAL TAX, VISHAKAPATNAM CENTRAL CGST COMMISSIONERATE 4. PRINCIPAL COMMISSIONER OF CENTRAL TAX, VISHAKAPATNAM CGST COMMISSIONERATE 5. STATE BANK OF INDIA, NEAR MAIN ROAD, BUS STAND ROAD, CHEEPURUPALLI, DISTRICT VIZIANAGARAM, ANDHRA PRADESH - 532128 ...RESPONDENT(S): 2 Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased tomay be pleased to issue a writ, order or direction. more particularly in the nature of a writ of mandamus declaring the Order in Original No. 20/2024-25-ST-AC dated 29-05-2024 bearing DIN 20240555YJ000009643E as being void, illegal. arbitrary, violative of Article 14 of the Constitution of India and consequently set aside the same and pass IA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased to stay all further action including collection of tax pursuant to Order in Original No. 20/2024-25-ST-AC dated 29-05-2024 bearing DIN 20240555YJ000009643E and pass IA NO: 2 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased to suspend the operation of the Notice u/s. 87 dated 26-11- 2024 addressed by the Respondent No, 3 to Respondent No. 5 and pass IA NO: 1 OF 2026 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased May be pleased to grant leave for filing reply in the Writ Petition No. 30783 of 2024 and pass Counsel for the Petitioner: 1. ANIL KUMAR BEZAWADA Counsel for the Respondent(S): 1. VENNA HEMANTH KUMAR(CENTRAL GOVERNMENT COUNSEL) The Court made the following: 3 The Court made the following order: (per Hon’ble Sri Justice R. RaghunandanRao) The Petitioner had declared a total income of Rs.98,88,351/- for the Financial Year 2015-16, and Rs.1,94,42,565/- for the financial year 2016-17, aggregating to Rs.2,93,30,916 in the Annual returns filed by the petitioner under the Income Tax Act. 2. The Respondent No.3, initiated proceedings under the Service Tax regime, contending that the income received by the petitioner arose out of services rendered and sought to tax the same. 3. The petitioner, after receiving the show cause notice, dated 06.02.2020, had submitted his explanation contending that the receipt of money, above, came out of the supply of man power, which was not taxable and that notification No.30/2012-ST dated 20.06.2012 had absolved the petitioner from paying service tax as said services was placed under the reverse charge mechanism, requiring the recipient of the service to pay the tax. 4. The 3rd respondent passed an order dated 29.05.2024 rejecting the contentions of the petitioner and raising a demand of Rs.43,50,196/- as the tax payable under Section 73(1) of Finance Act, penalty of Rs.10,000/-, another penalty of Rs.1,35,400/- and further penalty of Rs.43,50,196/- on the ground that there was separation of Tax. 5. Aggrieved by the said order, the petitioner has approached this court by way of this present writ petition. 6. Sri Anil Kumar Bezawada, the learned counsel for the petitioner contends that the 3rd respondent, has not considered the specific contention of the petitioner that the service tax liability is on the recipient of the services, on account of Notification No.30/2012-ST. The learned counsel for the petitioner would contend that the said notification makes it amply clear that it is only the recipient of the service who has to pay the service tax and there is no service tax liability on the petitioner as the petitioner was the supplier of the services. 4 7. Sri V.Hemanth Kumar, learned Standing counsel appearing for the respondents would contend that the said notification would be applicable only when the supplier of the services is able to demonstrate that the recipient of the services had discharged the service tax liability, under reverse charge mechanism. The learned Standing Counsel also contended that the contentions of the petitioner cannot be accepted. 8. A perusal of the impugned order of the 3rd respondent dated 29.05.2024 would show that respondent No.3 had recorded that the petitioner has raised the applicability of notification No.30 of 2012. However, this issue has not been answered by the 3rd respondent. A perusal of Notification No.30/2012- ST would show that the burden of discharging the tax liability is on the recipient of the service in respect of services provided or agreed to be provided by way of supply of man power for any purpose or security services. The impugned order of the respondent No.3 does not dispute the contention of the petitioner that the services rendered by the petitioner relates to supply of man power. In that view of the matter, the petitioner would definitely be entitled to raise the contention that there is no liability on him to pay service tax. As this issue has not been considered by the 3rd respondent, it would be appropriate that the matter be remanded back to 3rd respondent for a decision in this regard. Needless to say this court must also record that there is stipulation, anywhere in the notification, that the supplier of services will not be absolved from payment of service tax unless it is demonstrated that the recipient of the services has paid the taxes. 9. Accordingly, the Writ petition is allowed, setting aside the impugned order of assessment, dated 22.05.2024, passed by the 3rd respondent and the matter remanded back to the 3rd respondent to pass necessary orders, in accordance with the observations of this Court in the present order. 5 10. Any coercive steps taken pursuant to the impugned order including any attachment of bank accounts of the petitioner shall stands set aside. There shall be no order as to costs. As a sequel, interlocutory applications pending, if any shall stand closed. _______________________ R RAGHUNANDAN RAO, J ________________ T.C.D.SEKHAR, J 24.02.2026 SSA 6 97 THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO AND THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION NO: 30783/2024 (per Hon’ble Sri Justice R Raghunandan Rao) 24.02.2026 SSA