2023 (4) TMI 346 - AT - Service Tax

Levy of Service Tax - Construction of Complex Service - cooperative society of the Members have provided construction of complex service to its members - mutuality of interest - HELD THAT - This issue is settled in the case of M/s. Shrinandnagar-iv Co-operative Housing Society Limited. This Tribunal vide order dated 30.07.2009 2009 (7) TMI 135 - CESTAT, AHMEDABAD decided the matter on merit in the appellant s favour holding that the appellant is eligible for refund however, it was remanded only for the examining the aspect of unjust enrichment, holding that in the absence of a contractor hired by Society and nature of the transaction between the parties and in the light of definition of service and its liability for service tax, the transaction in this case cannot be considered taxable. With the above order of the Tribunal which was upheld by the Hon ble High Court in 2011 (6) TMI 289 - GUJARAT HIGH COURT , the issue on merit that whether the service of construction of complex provided by the appellant s Cooperative Housing Society to its members is liable to service tax or otherwise has been settled in favour of the appellant. Appeal allowed.

Summary

Issues involved:
The appeal challenges the demand of service tax on the category of 'Construction of Complex Service' imposed by the adjudicating authority, Commissioner, Service Tax, Ahmedabad, on the cooperative society providing construction services to its members.

Summary:
The appellant contended that the service provided by cooperative societies to its members, involving mutuality of interest, does not establish a relationship of service provider and service recipient, hence not liable for service tax. The appellant relied on a previous case involving similar facts where the Tribunal allowed the refund, indicating that the service between cooperative housing societies and its members is not taxable.

Upon considering the submissions, the Tribunal referred to previous decisions and circulars to determine that in cases where a cooperative society constructs residential complexes without engaging a contractor, the transaction is between the society and its members, not constituting a taxable service. The Tribunal emphasized that in the absence of a contractor, the nature of the transaction does not attract service tax.

The Hon'ble High Court of Gujarat upheld the Tribunal's decision, stating that the explanation regarding construction of a complex intended for sale does not apply retrospectively to past events. The Court dismissed the Tax Appeal, affirming that no question of law arises in the case.

In light of the settled legal position established by the Tribunal and upheld by the High Court, the impugned order demanding service tax from the cooperative housing society is set aside, and the appeal is allowed with any consequential relief according to the law.