2016 (10) TMI 236 - HC - Service Tax

Rectification application - 4th respondent has filed a counter affidavit in which it has been stated that there was a mistake in so far as the award amount being communicated and the details of such work awarded has also been produced by them. It has been categorically stated that the amount of ₹ 57,25,526/- indicated in the communication to the Assistant Commissioner, Service Tax, was a typographic error and the actual amount is only ₹ 5,72,526/-. Held that - considering the fact that the mistake has been categorically admitted by the 4th respondent it is only proper that the rectification application be considered. The 3rd respondent shall re-adjudicate the issue. There is also a contention raised by the petitioner that the construction carried out by the petitioner is of only two residential apartments and to come within the definition of a complex , there should be more than 12 residential units as per Clause 91(a) of Section 65 of the Finance Act, 1994. The respondent however would contend that the same is a question to be adjudicated upon by the assessing officer since even different awards made and carried out by different contractors if exceeding the limit would come within the definition. This is an aspect which need not be considered by this Court at this point of time since this Court is directing re-adjudication of the matter by the 3rd respondent. - Petition disposed of directing re-adjudication of matter

Summary

Issues:
1. Rectification application against order Exhibit P7.
2. Discrepancy in the award amount communicated by the 4th respondent.
3. Interpretation of the term "complex" under Section 65 of the Finance Act, 1994.

Analysis:
1. The petitioner, a works contractor, challenged order Exhibit P7 by filing a rectification application under Exhibits P8 and P9. The petitioner argued that they had only executed one construction work in the Financial Year 2008-2009 and 2009-2010, involving the construction of two residential apartments, which was below the assessable limit of ?10,00,000. The assessing officer, however, relied on information from the 4th respondent to assert that the petitioner had received ?62,07,465 for taxable services in the said Financial Years. Respondents 2 and 3 supported the assessment order, suggesting that the petitioner should file an appeal to challenge it.

2. The 4th respondent admitted a mistake in communicating the award amount, clarifying that the actual amount was ?5,72,526, not ?57,25,526 as previously indicated. Given this admission, the court deemed it appropriate to consider the rectification application. The judgment directed the 3rd respondent to re-adjudicate the issue based on the corrected information provided by the 4th respondent.

3. A contention was raised regarding the definition of a "complex" under Clause 91(a) of Section 65 of the Finance Act, 1994. The petitioner argued that their construction of two residential apartments did not meet the threshold of more than 12 residential units to be considered a complex. The standing counsel for the respondent, however, maintained that the assessing officer should determine this issue, as multiple awards by different contractors exceeding the limit could fall under the definition. The court refrained from deciding on this aspect, as the matter was being referred back to the 3rd respondent for re-adjudication.

In conclusion, the High Court disposed of the writ petition by directing the re-adjudication of the matter without imposing any costs, emphasizing that no observations on the merits of the case were made.