TMI Blog2010 (9) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... inding on the merits of the matter and the Department is bound to decide the issue in accordance with law, particularly Finance Act, 1994 and 2005 - time limit given to the petitioners to produce the records is over and therefore the concerned respondent is permitted to issue fresh summons - petitions are dismissed - 9835-9841, 8784-8787, 8822-8824, 9032-9034, of 2010 - - - Dated:- 14-9-2010 - W.P.Nos.9835, 9836, 9837, 9838, 9839, 9840, 9841, 8784, 8785, 8786, 8787, 8822, 8823, 8824, 9032, 9033, 9034, 10238, 10239, 10240, 10241, 10242, 11716, 11717, 12022, 17101, 17102, 19348 of 2010 W.P.Nos.51, 52, 53, 54, 138, 139, 140, 141, 142, 143, 303, 304, 305, 307, 308, 309, 310, 468, 469, 470, 471, 482, 483, 484, 567, 568, 569, 570, 571, 572, 573, 574, 575, 576, 696, 697, 698, 699, 700, 701, 702, 703, 2416, 9921, 9922, 9923, 9924, 9925, 11094, 11225, 11912, 11913, 12697, 13174, 13175, 25871 of 2009 W.P.Nos.30122, 30123 of 2008 N. Paul Vasanthakumar, J. REPRESENTED BY : S/Shri R.L. Ramani, Sr. Counsel, for Ms. R. Hemalatha, K.C.S.K. Balaji, R. Saravana, Kumar, B. Raveendran and S. Lakshmanasamy, for the Petitioners. S/Shri K. Ramakrishna Reddy, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contract will hand over the roads to the respective authority. (c) According to the petitioners, the nature of the contract awarded falls under the definition of Works Contract under the TNGST Act, 1959, and TNVAT Act, 2006. sub-clause (zzza) to Clause 65(105) of the Finance Act, 1994 was inserted by Section 134 of the Finance Act, 2007 with effect from 1-6-2007 which states that taxable service means any service provided or to be provided to any person, by any other person in relation to the execution of the works contract, excluding works contract in respect of roads, airports, railways transport terminals, bridges, tunnels and dams . The petitioners are doing road repair works and they have not taken any registration for service tax and they are continuously assessed under TNVAT Act, 2006, for the levy of tax of deemed sale of goods in the works contract and they are paying the same. (d) According to the petitioners, prior to 16-6-2005, a service called construction service was defined under Section 65(30a) of the Act. Under the said provision, construction services does not include laying or relaying of roads. Therefore from 16-6-2005, construction service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le under the Finance Act, 1994, and therefore these writ petitions are not maintainable. 5. The learned Senior Counsel appearing for the petitioners submitted that when the road works are excluded from the provisions of the Service Tax, the incidental works viz., maintenance relating to roads also cannot attract service tax as these works are also carried out by the Government/Local Authority and if tax is payable for these kind of works, the Government/Local Authority have to incur more expenses and there will be no purpose in collecting service tax for such work even if the same is appropriated between the Union Government and State Governments. The learned Senior Counsel also submitted that the object of granting exemption for the road works cannot be defeated by the impugned circular issued by the first respondent and realising the said position, subsequent notification was issued on 27-7-2009 which clearly show that at any point of time the contractors doing road works need not pay service tax. 6. The learned counsels appearing for the respondents on the other hand submitted that the notification dated 27-7-2009 is an exemption from paying service tax in relation to mana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-2009 taking note of public interest granted exemption from paying service tax in relation to works namely management, maintenance/repairs of roads under Section 66 of the Finance Act, 1994. The said notification nowhere states that the exemption is granted with retrospective effect. It is well settled in law that unless a notification issued specifically stating 'with retrospective effect', such notification will operate only prospectively. The Division Bench of the Kerala High Court in the decision reported in 2009 (237) E.L.T. 257 (Ker.) (Commissioner of Central Excise v. Mustang Rubbers Industrial Estate) considered similar notification issued under Section 5A(1) of the Central Excise Act, 1944, and held in para 3 as follows, 3................The very purpose of Clause 5(a) to Section 5A is to cloth the Government with the power to grant benefit of any notification retrospectively wherever it is required or desirable. It is for the Government to consider whether a notification should be given retrospectively, and if so, up to what period and unless it is so provided, the Tribunal or even the High Courts have no power to grant retrospectivity for a notification in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax-payer. In the said decision, following its earlier decision reported in 2006 (204) E.L.T. 517 (S.C.) (Commissioner of Central Excise, Bangalore v. M/s. Mysore Electricals Industries Ltd.) the Supreme Court held that beneficial circular has to be applied retrospectively, while oppressive circular has to be applied prospectively, which means, when circular is against the assessee, they have right to claim enforcement of the same prospectively. 11. The above two judgments of the Supreme Court are with reference to circular and not amendment. Hence the said judgment will not help the petitioners to quash the summons. The notification dated 27-7-2009 cannot be given retrospective effect in the absence of specific and express provision as held by the Supreme Court in the decision reported in (2006) 10 SCC 704 = 2006 (203) E.L.T. 538 (S.C.) (Commissioner of Customs v. Spice Telecom). Thus, the notification dated 27-7-2009 granting exemption from levy of service tax to road maintenance and repairs is to be held only as prospective and for the earlier period the petitioners are bound to produce the records to the show cause notice/summons. The circular dated 23-2-2009 cannot be set as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to establish that there was any ambiguity in the Finance Act, definitely they will get benefit. 13. As far as the summons issued for the production of documents for the period from 16-6-2005 to 26-7-2009 are concerned, the petitioners are bound to produce the same before the authority concerned. The authorities are bound to consider all aspects and decide the matter in the light of the Finance Act, 1994 and 2005, particularly whether road maintenance and repair is coming within the taxing statute without reference to the circulars issued while adjudicating the matter. Even after the adjudicating authority's order, the petitioners can very well agitate their non-liability before the appellate authority or appropriate forum and finally before this Court as held by the Supreme Court in the decision reported in (2010) 4 SCC 772 : 2010 (4) LW 1 = 2010 (253) E.L.T. 3 (S.C.) (Raj Kumar Shivhare v. Asstt. Director, Directorate of Enforcement). Thus the writ petitions are not maintainable as contended by the respondents in the counter affidavit. 14. It is made clear that any finding given in this order need not be construed as giving any finding on the merits of the matter and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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