2019 (7) TMI 1247 - HC - Service Tax

Determination of value of the land and the value of the goods for the purposes of a works contract - Undivided share in the land separately - Rule 2A of the Service Tax (Determination of Value) Rules, 2006 - HELD THAT - While Section65(105)(zzzza) deals with works contract and it is possible to argue that a composite contract for the development of complex and sale of units could fall within its scope,this Court did not propose to examine that issue since the entire argument revolved around the scope of taxable service as envisaged in Section 65 (105) (zzzh) of the Finance Act, 2010 which is specific to construction of complex . There is merit in the contention of the learned counsel for the Respondent that the amendment to Rule 2A of the Rules would not advance the case of the Respondents/Review Petitioners - review petition dismissed.

Summary

Issues:
Review petition based on the amendment to Rule 2A of the Service Tax (Determination of Value) Rules, 2006.

Analysis:
The review petition was filed by the Principal Commissioner, GST and CX Commissionerate, arguing that the earlier decision of the Court did not consider the amendment to Rule 2A of the Rules. The amendment, made on 31st March 2017, aimed to separately determine the value of land and goods in a works contract. It was contended that this amendment impacted the basis on which a previous decision was made regarding Section 65 (105) (zzzh) of the Finance Act, 2010. However, the Respondent's counsel argued that the amendment to Rule 2A does not apply to Section 65 (105) (zzzh) concerning the 'construction of complex.' The Court acknowledged that the amendment to Rule 2A specifically relates to works contracts, as evident from its title. The Court noted that the previous decision did not delve into the works contract issue as it focused on the taxable service under Section 65 (105) (zzzh) related to 'construction of complex.' Therefore, the amendment to Rule 2A was deemed irrelevant to the current case, supporting the Respondent's position.

The Court dismissed the review petition as no other grounds were presented, and the sole contention regarding the amendment to Rule 2A was found to be insufficient to alter the previous decision. The judgment emphasized the specificity of the amendment to works contracts and its lack of impact on the subject matter of Section 65 (105) (zzzh) concerning the 'construction of complex.' The dismissal of the review petition reaffirmed the Court's stance on the distinct nature of the issues addressed in the original decision and the limited scope of the amendment to Rule 2A in the context of the case at hand.