2009 (3) TMI 110 - HC - Service Tax

Maintenance and Repair of Roads construction of roads excluded from the category of works contract 65(105)(zzzza) and commercial or industrial construction service 65(25b) but repaid and maintenance of road would cover within the category of 65(105(zzg) in relation to management, maintenance or repair Petition sought the HC to declare the civil works of maintenance of roads are not taxable services in view of exclusion HC asked the petitioner to produce materials before the concerned authority respondents should decide the law after considering the legal provisions and the materials made available by the petitioner

Summary

Issues:
1. Exigibility of works undertaken by the petitioner to service tax under various provisions of the Finance Act.
2. Interpretation of Section 65(25b) regarding commercial or industrial construction service.
3. Analysis of Section 65(105)(zzg) in relation to management, maintenance, or repair services.
4. Examination of Section 65(105)(zzzza) concerning the execution of works contracts excluding certain categories.

Issue 1: Exigibility of works to service tax
The petitioner, specialized in road works, challenges the demand for service tax on civil works maintenance of roads. The contention revolves around the interpretation of relevant provisions of the Finance Act. The petitioner argues that the services provided do not fall under taxable services as per Section 65(25b), which excludes services related to roads, airports, railways, etc. Additionally, reliance is placed on Section 65(105)(zzzza) to assert that works contracts concerning roads are exempt from service tax. The petitioner received notices and communications indicating the tax liability, leading to the filing of the writ petition seeking relief.

Issue 2: Interpretation of Section 65(25b)
Section 65(25b) defines "commercial or industrial construction service" and outlines various activities falling under its purview. The petitioner emphasizes that services provided in respect of roads are expressly excluded from the scope of this provision. By referring to Section 65(64) defining "management, maintenance, or repair," the petitioner argues that the works executed do not align with services subject to service tax under the Finance Act.

Issue 3: Analysis of Section 65(105)(zzg)
Section 65(105)(zzg) pertains to services related to management, maintenance, or repair. The petitioner contests the applicability of this provision to the works undertaken, maintaining that the nature of the services provided does not fit within the taxable category outlined in the statute. The petitioner presents agreements executed before the enforcement of relevant clauses, seeking exemption based on the timeline of completion and payment received.

Issue 4: Examination of Section 65(105)(zzzza)
Section 65(105)(zzzza) addresses works contracts excluding specific categories like roads, airports, railways, etc., from service tax. The petitioner relies on this provision to argue for the non-taxability of the works executed concerning roads. The petitioner faces challenges from the respondents who assert that the classification of services under the Finance Act necessitates a thorough review of the materials presented to determine the tax liability accurately.

The judgment directs the petitioner to produce additional materials within a stipulated timeframe for further consideration by the concerned authority. The court emphasizes that the decision-making process should adhere to legal provisions without being strictly bound by previous communications, allowing for a comprehensive review of the case based on the materials presented.