TMI Blog2016 (4) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... f the fifth respondent as a service provider. The petitioner did not stand on a different footing than those persons. Therefore, the challenge of the petitioner to the circular, apart from the question of locus standi, does not merit acceptance. - Decided against the petitioner - Writ Petition No. 10515 of 2016 and WMP. No. 9214 of 2016 - - - Dated:- 7-4-2016 - V. Ramasubramanian And N. Kirubakaran, JJ. For the Petitioner : Mr. B. N. Suchindran For the Respondents : Mr.A.P.Srinivas, Mr.G.Natarajan ORDER Order of the Court was made by V. Ramasubramanian, J The petitioner, who entered into an agreement with the fifth respondent herein for the joint development of a property owned by him and his brother and sisters, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the undivided share of the land. 4. Clause 23 of the said agreement reads as follows : The parties of the first part are liable to pay all government taxes, statutory levies including service tax, VAT on construction to the extent of 7,600 sq.ft. of super built up area including common area being residential apartments along with two covered car parks each as contemplated in Clause (5) in the total super built area to be constructed in Schedule A to be delivered by the party of the second part, prior to handing over of the apartments. All other taxes, duties, if any, etc., shall be borne according to the share of super built up area related to parties of first and second part. 5. In view of the terms and conditions of the agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the circulars, in our considered view, cannot be challenged by the petitioner. 8. However, relying upon two decisions of the Allahabad High Court, one in Indian Explosives Limited Vs. Commissioner of Sales Tax [(1978) 41 STC 315] and another in U.P. Solvent Extractors Association Vs. Union of India [1987 Law Suit (All.) 211], it is contended by Mr.B.N.Suchindran, learned counsel for the petitioner that the petitioner has locus standi to maintain the writ petition. 9. But, a careful look at the decision in Indian Explosives Limited would show that the challenge that was made in the said writ petition arose out of a particular assessment relating to the assessment year 1969-1970. The very liability of the petitioner before the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf against the liability, to which, the owner was willing to submit himself to the detriment of the tenant. 13. The cases of the above nature are clearly distinguishable. But, in a case where a circular is challenged questioning the very liability, we do not think that the concept of locus standi could be widened. The petitioner, after having entered into an agreement for development with the fifth respondent and after having been a party to Clause 23 of the said agreement, cannot now turn around and say that the circulars imposing an obligation upon persons, who entered into such contracts, are invalid in the eye of law. 14. The contention that the person, to whom the burden of tax is ultimately passed on, is entitled to challenge a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expression 'service'. 17. Section 65B(44) reads as follows : 'Service' means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include (a) an activity which constitutes merely, (i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or (ii) a transaction in money or actionable claim; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any Court or tribunal established under any law for the time being in force. 18. According to the learned counsel for the petitioner, the agreement for development tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of about 15,600 sq.ft of super built up area in the land that belongs to the petitioner and his siblings. It may be true that after construction, the parties may exchange the constructed area for the undivided share of the land. But, the agreement can also be looked at from another angle. 23. It is also possible for the Department to contend that a person, who is the owner of the land, had engaged a contractor to put up a construction for themselves upto a particular limit. Since the cost of construction could not be paid by the owner in the form of cash, they agreed to exchange the undivided share of the land with the contractor. If viewed from that angle, what the developer had done is actually the service of construction. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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