Low Tax Effect: Supreme Court dismisses Service Tax Appeal in view of Revenue Circular [Read Order]
S C bench dismissed the service tax appeal on the ground of low tax effect
Low Tax Effect – Supreme Court – Service Tax Appeal – Revenue Circular – taxscan
Low Tax Effect – Supreme Court – Service Tax Appeal – Revenue Circular – taxscan
A two judge bench of the Supreme Court dismissed the appeal on the ground of low tax effect as being covered by the Circular No. 17 of 2019 issued by the Department of Revenue, Ministry of Finance.
The assessee, P and C Constructions Pvt. Ltd had entered into a contact for construction of residential quarters with the M/s Central Public Works Department( CPWD ), Trivandrum and had constructed 192 residential complexes for which the assessee had discharged the applicable service tax. Revenue fined the assessee for non payment of service tax. The assessee approached the Commissioner Central Excise (Appeals), Salem.
Assessee had contended before Customs Excise & Service Tax Appellate Tribunal ( CESTAT ) that demand of service tax liability prior to 01/06/2007 is liable to be set aside, in view of the decision of the honorable Supreme Court in CCE & CC Kerala v, Larsen & Toubro Ltd. Assessee had further contended that in Khurana Engineering Ltd. Vs CCE Ahmedabad , the construction of quarters for government employees of Income Tax Department as per the contract given by CPWD was held to be a service provided to Government of India directly and that the dues of the residential complex by government is covered by the definition “personal use”.
Revenue had contended before CESTAT that the assessee had failed to properly file the proper statutory half yearly ST-3 returns with correct taxable value. Revenue contended that the assessee had to pay interest justified the imposition penalties as proposed in the show cause notice.
CESTAT had held that Services in relation to construction of such tenements will not be exigible for service tax liability. The CESTAT bench had observed ”Going by the stare decisis of the above decisions, we find that the Commissioner ( Appeals ) is justified in allowing the assessee’s appeals and therefore, we dismiss the Department Appeal.”
The two judge Supreme Court bench comprising Pamidighantam Sri Narasimha and Aravind Kumar dismissed the appeal on the ground of low tax effect as being covered by the Circular No. 17 of 2019 dated 08.08.2019 issued by Department of Revenue, Ministry of Finance.
Asssessee was represented by Ashok Mathur, R. Sudhinder, Prerana Amitabh and Manpreet Kaur Bhalla. Revenue was represented by N Venkataraman, Nisha Bagchi, Mukesh Kumar Maroria, V C Bharathi, Anirudh Bhatt, Shivank Pratap Singh, Navanjay Mahapatra and R R Rajesh.
To Read the full text of the Order CLICK HERE
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