Dept. Treated Exempt Road and Irrigation Work Services as Taxable Manpower Supply: Gauhati HC Dismisses Writ to Determine Facts

The Gauhati High Court dismissed a writ petition filed by Md. Baharul Islam, who was subcontracted by Simplex Infrastructures Ltd. to perform road and irrigation construction work under National Highway-31. The petitioner contended that his work (including tasks like concreting, bed preparation, etc.) was exempt under Notification No. 25/2012-ST (Clauses 13(a), 12(d), and 29(h)), which cover construction of roads and irrigation works. Instead, the Department treated the entire work as supply of manpower, making it taxable, via a demand order for about ₹8,44,789 from the Deputy Commissioner, CGST & Central Excise. The petitioner argued this was wrong because the job was exempt and the demand notice improperly relied on Form 26AS/TDS entries among other records. The Department countered that factual findings support its view. The Court held that whether the nature of the contract is “works contract / construction / irrigation (exempt)” or “manpower supply (taxable)” is a question of fact. Such factual determinations are beyond what a High Court can settle in a writ proceeding under Article 226. Since there is an effective statutory appeal remedy, the writ was dismissed with liberty to appeal.