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TMI Blog2016 (8) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... n be passed - Held that:- The case of neither of the parties is that the liability, which may be put on the contractor/service provider, if tax is leviable, is being passed on to the Board, as the scheme of the Act provides for levy of tax 50:50 on service provider and the service recipient. Hence, the action of the Board, even if it is assumed that tax is leviable, to pass on their share of burden as per the provisions of the Act on the contractors is not envisaged in the clause. On the contract for construction of BPL houses, as awarded by the Board to the petitioners, no service tax is leviable w.e.f. 1.7.2012 - The Board is not entitled to pass on the burden of service tax payable on its part, if the tax is leviable, upon the contractors. - CWP No. 12304 of 2015 (O&M) - - - Dated:- 11-8-2016 - MR. RAJESH BINDAL AND MR. HARINDER SINGH SIDHU, JJ. For The Petitioner : Mr. Jagmohan Bansal, Mr. Sandeep Khunger, Mr. Gagneshwar Walia, Mr. Davender Gorsi for Mr. Rajesh Bansal, Mr. Rajnish Gupta, Mr. Vikrant Kackria, Mr. Vishal Munjal, Mr. Shakti Singh for Mr. S. N. Yadav, Advocates For The Respondent : Ms. Mamta Singla Talwar, Deputy Advocate General, Haryana. Mr. Sude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 vide notification dated 1.3.2015 w.e.f. 1.4.2015, however, vide Section 102 of the Finance Act, 2016, the exemption was restored again with retrospective effect from 1.4.2015 till 29.2.2016, with reference to three clauses, which were omitted from notification dated 20.6.2012. It was further submitted that after entry 12 in the notification dated 20.6.2012, entry 12A was inserted w.e.f. 1.3.2016 extending the exemption from payment of service tax in terms of the previous provisions upto 31.3.2020. 6. Taking the arguments further, learned counsel for the petitioner submitted that the issue was considered by a Division Bench of Patna High Court in Civil Writ Jurisdiction Case No. 16965 of 2015-Shapoorji Paloonji and Company Pvt. Ltd. v. Commissioner, Customs Central Excise and Service Tax and others, decided on 3.3.2016, where the issue was regarding levy of service tax on the award of contract for construction of an administrative block by Indian Institute of Technology, a body incorporated by Institutes of Technology Act, 1961, to National Building Construction Corporation Ltd. It was opined that Indian Institute of Technology, being a governmental authority, it shall be en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the department has assessed the tax on the transaction in question besides other activities being undertaken by the Board prior to the period in question and the current period as well. The orders have been impugned by filing appeals. He further submitted that in terms of the condition contained in the contract, the entire liability of payment of service tax of the contract is on the contractor. The amount of share of the Board was deducted from the running bills of the petitioners. For 50% payable at the hands of the petitioners, if leviable, is their own liability. As regards the case of the petitioner regarding claiming exemption under clause 14 of the notification dated 20.6.2012 is concerned, it was submitted that the project was not sanctioned by the competent authority. 9. Learned counsel appearing for the department submitted that clause 12 of the notification dated 20.6.2012 provides for exemption from payment of tax if it is a non-commercial transaction. In the case in hand, there was no material produced by the Board before the adjudicating authority to suggest that exemption, as envisaged in clause 12 of the notification dated 20.6.2012, was available to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of notification number 12/2012-Service Tax, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 210(E), dated the 17th March, 2012, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under Section 66B of the said Act, namely: xx xx xx 12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; xx xx xx 2. Definitions.- For the purpose of this notification, unless the context otherwise requires,- xx xx xx (s) governmental authority means a board, or an authority or any other body established with 90% or more participati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me into force on the Ist of April, 2015. The Finance Act, 2016 xx xx xx 102. Special provision for exemption in certain cases relating to construction of Government buildings.- (1) Notwithstanding anything contained in section 66B, no service tax shall be levied or collected during the period commencing from the Ist day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive), in respect of taxable services provided to the Government, a local authority or a Governmental authority, by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession; (b) a structure meant predominantly for use as - (i) an educational establishment; (ii) a clinical establishment; or (iii) an art or cultural establishment; xx xx xx Notification: 9/2016-S.T. Dated 01-Mar-2016 Exemption from Service Tax- Mega Notification- Amendment to Notification No. 25/2012-S.T. In exercise of the powers conferred by sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the State Government. Every year, the Board is to prepare a budget in advance for the next year and place it before the State Government for its approval. After sanction is granted by the State Government, the same is published in the official gazette. The Board is authorised to borrow money for implementation of the projects, as approved with prior approval of the State Government. Section 72 of the Act provides that the State Government shall exercise superintendence and control over the Board and its officers. The aforesaid provisions of the Act clearly show that the Board is a governmental authority, as it is fully under the control of the State Government. 15. The issue sought to be raised by the petitioners is that they are contractors engaged by the Board for construction of BPL houses from time to time. In all the cases, except two, the contract was entered into after 1.7.2012. There is no dispute about the period prior thereto as the petitioners in most of the petitions have categorically stated that service tax for that period was paid by them. The period in dispute is from 1.7.2012 onwards. 16. The petitioners approached this court for the reason that the Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be falling in the exemption clause. The notice issued for levy of service tax was quashed. 21. In view of our aforesaid discussion, it can safely be opined that for the kind of contract entered into between the petitioners and the Board, no service tax is leviable, hence, the action of the Board in deducting part of the service tax, though payable in the hands of the Board, if tax is leviable, from the bills of the petitioners is declared to be illegal. Issue No. (ii) 22. Another issue was raised regarding liability for payment of service tax, if payable. Though in view of our aforesaid findings, the issue has lost significance, however, as the argument was raised, we will touch upon the same. Condition No. 3 in the additional conditions, as provided for in the contract entered into between the parties, reads as under: 3. Royalty, Sales Tax, Excise Duty, Octroi, Service Tax or any other tax or levy, shall be paid by the contractor direct to the respective department in accordance with their rules and regulations enforce from time to time, without any liability to the Housing Board Haryana. [Emphasis supplied] 23. The stand of the petitioners was that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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