GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (11) TMI 845 - MADRAS HIGH COURT

2015 (11) TMI 845 - MADRAS HIGH COURT - 2015 (40) S.T.R. 632 (Mad.) , [2016] 90 VST 392 (Mad) - Demand of service tax - Works contract service - Construction Services provided to to various educational institutions - exemption as per Circular No.80/10/2004 ST, dated 17.9.2004 - Held that:- Admittedly, as on the date of passing the impugned proceedings, there was no evidence available before the first respondent to hold that whether the educational institutions to whom the petitioner provided con .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ontrary conclusion. If at all the first respondent was of such view, he could have very well directed the petitioner by providing an opportunity to produce the relevant documentary evidence regarding the educational institutions to whom, the petitioner provided construction service and thereafter, he could have decided the issue. - Petitioner were under bona fide impression that the service tax on the constructions provided to the educational institutions is exempted as per Circular No.80, d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

titution to which the petitioner provided constructions, itself is an industry and running for profit - impugned proceedings, dated 28.11.2014 of the first respondent are hereby set aside and the matter is remitted back to the first respondent to deal with the issue in terms of the exemption Circular No.80, dated 17.9.2004 - Decided in favour of assessee. - Writ Petition No.7483 of 2015 And M.P.No.1 of 2015 - Dated:- 28-7-2015 - Mr. S. Vaidyanathan, J For the Petitioner : Mr.S.Raveekumar For the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r Construction Services both to residential complex and other than residential complex including commercial/industrial buildings and civil structures to their various clients. It appears that during the course of audit of the accounts of the petitioner, it was noticed that the petitioner provided construction services to various educational institutions, viz., Sri Krishna College, SRM Institutions, etc., and also to hospitals, viz., Ganga Medical Centre of Ganga Hospital, but they have not disch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

etitioner. Pursuant to the same, the petitioner submitted their reply on 5.6.2014, inter alia, stating that for the construction of educational institutions, service tax is exempted as per Circular No.80/10/2004 ST, dated 17.9.2004 upto 30.6.2012 and they have been paying service tax on construction services provided to educational institutions from 1.7.2012. It is also stated that the total construction of education institutions was only ₹ 19,54,93,374/- and not ₹ 22,16,55,493/- as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

petitioner would be squarely covered under the definition of Clause 2(b) of the definition under Section 65(105)(zzzza) of the Finance Act, 1994 as a civil construction primarily for commerce or industry and hence, the petitioner is liable to pay the service tax. The first respondent also concluded that the petitioner has suppressed relevant facts relating to assessment of tax and accordingly, imposed interest and penalty. Accordingly, the first respondent has passed the impugned order. 4. Chal .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

)(b) of the Finance Act, service tax is liable to be levied only in respect of the construction made for the purpose of commerce or industry and the petitioner has admittedly provided construction for the educational institutions, which would not fall within the above said definition in order to attract levy of service tax. However, the first respondent has erroneously without considering the objections made by the petitioner properly, has passed the impugned order, which are liable to be quashe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ducational services and not making systematic profits and thereby, the first respondent has rightly construed that the educational institutions to whom the petitioner provided the construction service, are commercial and hence, the above said Circular does not apply to the case of the petitioner and accordingly, imposed the service tax. Hence, the learned counsel sought for dismissal of the writ petition. 6. Heard the learned counsel appearing for the petitioner and the respondents and perused t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

established solely for educational, religious, charitable, etc., However, according to the first respondent, the exemption of service tax can be claimed only in respect of construction services provided to the institutions which should solely impart education without any profit and if the institutions are earning profits, they cannot be construed as non-commercial, but only as industries. In such case, the exemption Circular cannot be made applicable. In the present case, after following the de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ional institutions per se cannot be held as non-commercial or non-profit industries. In this regard, I would like to emphasize on the fact that the quantum of fees collected by the private institutions alone (as compared to similar Government Institutions) is not a factor alone in determining a institution as commercial or profit oriented. The collection of higher fees could be for the reasons that they may be providing better infrastructural support and they may not be supported by any educa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of such an institutions and not by merely stating that they are in the field of education. 21. Therefore, I reject GRCIPL s claim that any educational institution automatically would mean that their activities would be beyond the pale of commerce or industry.. . Coming back to the case on hand, GRCIPIL have failed to provide any evidence that the educational institutions to whom they provided the services of constructions had not been making systematic profits and that their sole aim is to serve .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g the audit inspection, it was noticed that the petitioner provided construction services to various educational institutions, which according to the first respondent, had been making profits and that would be construed as commercial and thereby, the exemption claimed by the petitioner under Circular No.80, dated 17.9.2004 cannot be extended. Accordingly, a notice, dated 21.04.2014 has been issued to the petitioner and thereafter, ultimately, the impugned proceedings were issued. It is to be not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oned in para 20 that any claim on non-profit and non-commercial nature of institutions has to be substantiated only by way of establishing the credentials of such institutions and not by merely stating that they are in the field of education, however, considering the fact that the petitioner failed to provide any such evidence, the first respondent came to the conclusion that the educational institutions to whom the petitioner provided construction services, are making systematic profits and t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y evidence, there is no justification on the part of the first respondent to hold contrary that too on mere non-production of such evidence by the petitioner. In fact, till the impugned proceedings were passed by the first respondent, it was not known or expected by the petitioner that the first respondent would come to such a contrary conclusion. If at all the first respondent was of such view, he could have very well directed the petitioner by providing an opportunity to produce the relevant d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssue, inasmuch as the issue involved in the present writ petition is altogether different and ratio decided in the above said decision by the Hon ble Apex Court regarding the definition industry for the purpose of settling the industrial disputes, cannot be applied to the case on hand as the present subject matter relates to Finance Act, under which, the Circular dated 17.9.2004 has been issued pertaining to the exemption of Service Tax in respect of construction services. Even assuming that t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bit of construction of new building primarily for the purpose of commerce or industry under Section 65(105)(ii)(b) of the Finance Act which defined , in my opinion, is fallacious and cannot be tenable. 10. In fact, the consistent version of the petitioner is that they were under bona fide impression that the service tax on the constructions provided to the educational institutions is exempted as per Circular No.80, dated 17.9.2004 and that they only constructed classrooms, hostels, etc., which a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version