Gta rule vs inclusive of taxes

Summary of the case. 27.05.04: Tender notice was invited for transportation of coal by road from collieries of CCL. 04.08.04: LOI was given to petitioner (Transport Agencies) for transportation of coal by road from collieries of CCL. 23.11.04: Work Orders were placed on petitioner with condition that the rates are firm and inclusive of all charges and taxes shall be applicable for actual transportation of coal of good quality from collieries indicated and allowed by CCL. 01.01.2005: Vide Central Govt notification, it was stipulated that goods transport by road (Goods transport agency) would be taxable under service tax rule. 27.01.2005: Agreement was signed between TVNL and Petitioner. 07.04.2009: During transaction audit for the FY 2008-09, Auditor had raised an audit objection stating that “Avoidable liability of service tax of Rs 2.17 crore due to non-recovery from the coal transporters”. Between 19.09.09 to 21.10.2009: In compliance of audit objection an amount of Rs 2.24 crore was deposited to Central Excise and Service taxes, Ranchi vide GAR 7 Challans dtd 19.09.09, 29.09.09, 01.10.09 & 21.10.09. The aforesaid amount was recovered from the bills and security deposits of the various transporters. The entire tax amount as per audit objection, had been deposited to Central Excise & Service department Ranchi between 19.09.2009 to 210.10.2009. In the year 2011 & 2015, three transporters had filed writ petitions before High Court to refund of amount deducted from their bills, security deposits stating that action of Company is arbitrary and illegal. Petitioners are referring Notification No. 35/2004-Service Tax, dated 3rd December, 2004 prescribes that the person making payment towards freight would be liable to pay the service tax, in case the consignor or the consignee of the goods transported in one of the following,- (ii) Company established by or under the Companies Act; Whereas we are contesting the matter pressing hard that rate was inclusive of all taxes hence deduction was made as per the terms of Work Order, moreover the audit team of Principal Accountant General, Jharkhand had also stated right that service tax liability under GTA should be recovered from bills of Transporters. It is requested to suggest favorable legal point with respect to GTA Rule/order of any competent authority/tribunals, if any.