Home Case Index All Cases Service Tax Service Tax + HC Service Tax - 2019 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (6) TMI 1147 - HC - Service TaxReverse Charge (RCM) - Constitutional validity of the provision of sub-Clause (iv) of Rule 2 (1)(d) of Service Tax Rules, 1994 - Period from 2002-03 to 2004-05 - Consulting Engineer service - Liability of service tax - service tax in respect of the value of the said engineering plans, drawings and designs imported by it from M/s. Loesche GmbH of Germany for rendering services under the heading of ‘Consulting engineering Service’ - HELD THAT:- The service tax makes the person, who is providing the service, liable to pay. As such the Rules, more particularly Rule 2 (1)(d)(iv) of Service Tax Rules, 1994 (for short “the 1994 Rules”) cannot be held to be in conformity with the provisions of the Act and the Constitution of India. Article 265 of the Constitution of India lays down that no tax shall be levied or collected except by authority of law. As such, the impugned notification and amendment is ultra vires the Constitution and is liable to be set aside. All taxable services are defined in Section 65 of the Finance Act which include only three types of services namely, any service provided to an investor by a stock-broker, to a subscriber by telegraph authority and to a policy holder by a insurer carrying on general insurance business. Section 68 of the Act requires every person providing the taxable service to collect service tax at the specified rate. Section 69 of the Act provides that registration of a person responsible for collecting service tax. Sub-section 2 of Section 5 of the Act indicates that it was the provider of the service, who is responsible for collecting the tax and obliged to get itself registered. Thus, on a conspectus of Section 65, 66, 68 and 69 of the Act make it abundantly clear that no tax for rendering service can be collected from the recipient of service. The rule empowering the authorities to collect service tax from the recipient of services cannot be held to be valid and in conformity with law - Rule 2 (1)(d)(iv) of Service Tax Rules, 1994 is ultra vires the provisions of the Act and the Constitution and is accordingly declared bad in law. Appeal allowed - decided in favor of appellant.
|