W.P. (C) 5636/2010. Case: Vistar Construction (P) Ltd. Vs Union of India & Ors., [Alongwith W.P. (C) 3632/2012]. High Court of Delhi (India)
| Case Number | W.P. (C) 5636/2010 |
| Counsel | For Appellant: Mr. J. K. Mittal, Mr. Arun Gulati and Mr. Rajan Bharti, Advs. And For Respondents: Mr. Sumeet Pushkarna, Adv., Ms. Sonia Sharma, Mr. V. C. Jha and Mr. Ashish Virmani, Advs. |
| Judges | Badar Durrez Ahmed and R.V. Easwar, JJ. |
| Issue | Central Excise Act, 1944 - Section 37B; Finance Act 1994 - Sections 65(105)(zzzza), 66, 67, 67A, 83 |
| Judgement Date | January 23, 2013 |
| Court | High Court of Delhi (India) |
Judgment:
Badar Durrez Ahmed, J.
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These writ petitions are being disposed of together as they raise common issues. Both the writ petitions are directed against the instruction dated 28.04.2008 issued by the Tax Research Unit, Department of Revenue, Ministry of Finance, Government of India purportedly in exercise of the powers under Section 37B of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. The petitioners in these writ petitions challenge the said instruction on the ground that it is contrary to the law as declared by the Supreme Court. The main issue in these writ petitions is with regard to the applicability of the rate of service tax in respect of the Works Contract Service which is defined in Section 65(105)(zzzza) of the Finance Act, 1994. The case of the petitioner is that the said services were rendered prior to 01.03.2008 when the rate of service tax on the said service was increased from 2% to 4%. It is an admitted position that the services were rendered prior to 01.03.2008 as would be apparent from the counter affidavit in WP(C) 5636/2010 wherein, in reply to ground F, interalia, the following is stated:-
The impugned demand of service tax has been issued to the petitioner as they received payment after 01.03.2008 i.e. after the enhancement of rate of tax from 2% to 4% for the services provided by them on or before 01.03.2008.
In the other writ petition there is no denial of the averment made by the petitioner that the services were rendered prior to 01.03.2008.
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It is the case of the respondents that by virtue of the impugned instruction dated 28.04.2008, the rate of service tax is to be determined based on the date of receipt of payment and not on the date of rendition of service.
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Before we deal with this issue on the point of law it would be appropriate for us to indicate certain other facts. In WP(C) 5636/2010 the challenge is both to the instruction dated 28.04.2008 as also to the show cause notice dated 16.02.2009 but, only to the extent that a demand is sought to be raised based on the issue of rate of service tax to the extent of ` 1,43,191/- which is bifurcated into two amounts of ` 1,39,021/- being the service tax element and ` 4,170/- being the education cess on the said service tax element. It is clearly understood by the petitioner and the respondent that the challenge to the show cause notice dated 16.02.2009 is only limited to this demand of ` 1,43,191/- and insofar as the remaining portion of the show cause notice is concerned that is not the subject matter of this writ petition and has been challenged separately by way of another writ...
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