Gujarat High Court
Nareshkumar Dashrathbhai Patel vs Assistant Commissioner, Cgst, Mehsana on 7 May, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/1008/2024 JUDGMENT DATED: 07/05/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 1008 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE P. M. RAVAL
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Approved for Reporting Yes No
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NARESHKUMAR DASHRATHBHAI PATEL
Versus
ASSISTANT COMMISSIONER, CGST, MEHSANA
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Appearance:
MR. HARDIK V VORA(7123) for the Petitioner(s) No. 1
DEEPAK N KHANCHANDANI(7781) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE P. M. RAVAL
Date : 07/05/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr. Hardik Vora for the petitioner through video conference and learned advocate Mr. Deepak Page 1 of 10 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu May 15 2025 Downloaded on : Sat May 17 10:40:02 IST 2025 NEUTRAL CITATION C/SCA/1008/2024 JUDGMENT DATED: 07/05/2025 undefined N. Khanchandani for the respondent.
2. Having regard to the controversy involved which is in a narrow compass, with the consent of learned advocates for the respective parties, the matter is taken up for hearing.
3. Rule returnable forthwith. Learned advocate Mr. Deepak N. Khanchandani waives service of rule on behalf of the respondents.
4. By this petition under Articles 226 and 227 of the Constitution of India, the petitioner has challenged the impugned order-in- original dated 31.01.2023 issued on 02.02.2023 by the respondent passed under section 73 of the Finance Act, 1994. Page 2 of 10 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu May 15 2025 Downloaded on : Sat May 17 10:40:02 IST 2025
NEUTRAL CITATION C/SCA/1008/2024 JUDGMENT DATED: 07/05/2025 undefined (For short "the Service Tax Act")
5. Brief facts of the case are that the petitioner is a Doctor by profession and is running a clinic in the name of "Harsha Clinic". The services offered by the petitioner in the medical profession fall under category of healthcare services and thereby qualifying for exemption from service tax as per Mega Exemption Notification No.25/2012-ST dated 20.06.2012.
6. The respondent issued a show cause notice dated 18.10.2021 under section 73(1) of the Service Tax Act calling upon the petitioner to show cause as to why service tax amounting to Rs.1,75,522/- should not be demanded and recovered along Page 3 of 10 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu May 15 2025 Downloaded on : Sat May 17 10:40:02 IST 2025 NEUTRAL CITATION C/SCA/1008/2024 JUDGMENT DATED: 07/05/2025 undefined with interest and penalty under the provisions of the Service Tax Act.
7. It is the case of the petitioner that the petitioner had intimated about the receipt of show cause notice to his Tax Consultant Mr. Kiran Patel and the petitioner was under the impression that the same was dealt with properly. Thereafter, respondent issued letters dated 25.11.2022, 08.12.2022 and 28.12.2022 providing opportunity of personal hearing to the petitioner scheduled on 05.12.2022, 16.12.2022 and 05.01.2023 respectively.
8. The petitioner personally attended the hearing along with his Tax Consultant on 16.12.2022 and explained to the respondent Page 4 of 10 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu May 15 2025 Downloaded on : Sat May 17 10:40:02 IST 2025 NEUTRAL CITATION C/SCA/1008/2024 JUDGMENT DATED: 07/05/2025 undefined that he is a practising Doctor at the clinic and is not liable for payment of service tax as his income is exempt as per Entry No.2 of Notification No.25/2012.
9. The petitioner also prepared a reply dated 21.12.2022 along with his renewal slip from Council of Homeopathic System of Medicine, Gujarat State and letter from Kukarwada Gram Panchayat confirming that the petitioner is a Doctor. However, the petitioner could not submit the reply in time before the impugned order is passed by the respondent on 31.01.2023.
10. Learned advocate Mr. Hardik Vora for the petitioner submitted that on perusal of the impugned order as well as show cause notice, the same are without Page 5 of 10 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu May 15 2025 Downloaded on : Sat May 17 10:40:02 IST 2025 NEUTRAL CITATION C/SCA/1008/2024 JUDGMENT DATED: 07/05/2025 undefined jurisdiction as respondent could not have assumed the jurisdiction to levy service tax upon doctor as healthcare medical services are exempted under Notification No.25/2012.
11. It was further submitted that though the respondent has taken into consideration the Notification No.25/2012, but raised the demand only on the ground that the petitioner did not submit any reply to the show cause notice and that as per the information received from the income tax department, there was tax deducted at source reflected in Form 26AS. It was submitted that merely on the basis of Form 26AS, liability to pay service tax could not have been raised. It was also pointed out from the income-tax return Page 6 of 10 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu May 15 2025 Downloaded on : Sat May 17 10:40:02 IST 2025 NEUTRAL CITATION C/SCA/1008/2024 JUDGMENT DATED: 07/05/2025 undefined placed on record that profession of the petitioner is stated to be Doctor at village Kukarwada, Taluka Vijapur District Mehsana.
12. It was therefore, submitted that as the medical services offered by the petitioner is exempt from levy of service tax, the impugned show cause notice and order are without jurisdiction and liable to be quashed and set aside.
13. On the other hand, learned advocate Mr. Deepak Khanchandani submitted that the petitioner has not responded to any of the notices and has not filed any reply and therefore, the respondent has no option but to raise the demand of service tax on the basis of the information received from Page 7 of 10 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu May 15 2025 Downloaded on : Sat May 17 10:40:02 IST 2025 NEUTRAL CITATION C/SCA/1008/2024 JUDGMENT DATED: 07/05/2025 undefined the income-tax department which clearly shows that the petitioner has rendered services and tax was deducted at source which is not in dispute.
14. It was therefore, submitted that no interference is called for while exercising extra-ordinary jurisdiction under Article 227 of the Constitution of India as the petitioner has alternative efficacious remedy to challenge the impugned order-in-original before the appellate authority.
15. Having heard the learned advocates for the respective parties and considering the facts of the case, it is not in dispute that the medical services offered by the petitioner is exempted as per Exemption Page 8 of 10 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu May 15 2025 Downloaded on : Sat May 17 10:40:02 IST 2025 NEUTRAL CITATION C/SCA/1008/2024 JUDGMENT DATED: 07/05/2025 undefined Notification No.25/2012 dated 20.06.2012 and therefore, the show cause notice as well as the order-in-original are without jurisdiction.
16. It is also not in dispute that the respondent has not carried out any further inquiry on the basis of information received from the income tax department in Form 26AS to verify as to whether the petitioner was providing medical services or not which is exempt under Notification No.25/2012.
17. Considering such facts, we are of the opinion that respondent could not have assumed the jurisdiction under the provisions of the Service Tax Act for levy of service tax for the year 2016-2017. The Page 9 of 10 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu May 15 2025 Downloaded on : Sat May 17 10:40:02 IST 2025 NEUTRAL CITATION C/SCA/1008/2024 JUDGMENT DATED: 07/05/2025 undefined impugned show cause notice and orders are therefore, quashed and set aside.
18. Rule is made absolute to the aforesaid extent. No order as to costs.
(BHARGAV D. KARIA, J) (P. M. RAVAL, J) RAGHUNATH R NAIR Page 10 of 10 Uploaded by RAGHUNATH R NAIR(HC00196) on Thu May 15 2025 Downloaded on : Sat May 17 10:40:02 IST 2025