Non-resident services pre-Section 66A not taxable: Punjab & Haryana HC

The Punjab and Haryana High Court held that services provided by a non-resident before the insertion of Section 66A in the Finance Act, 1994, were not subject to service tax. The court dismissed the Revenue's appeals against the Customs, Excise and Services Tax Appellate Tribunal's orders, citing a Bombay High Court judgment. The High Court's decision aligned with the precedent set in Commissioner of Central Excise v. M/s Kansal Hosiery Exports, leading to the dismissal of the appeals.

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Issues:
Effect of insertion and implementation of Section 66A in the Finance Act, 1994.

Analysis:
The judgment by the Punjab and Haryana High Court dealt with the effect of the insertion and implementation of Section 66A in the Finance Act, 1994. The Revenue had filed appeals against orders passed by the Customs, Excise and Services Tax Appellate Tribunal, New Delhi. The key issue revolved around the levy of service tax through Section 66A, introduced on 18.4.2006. The Tribunal, relying on a Bombay High Court judgment, held that transactions before this date would not be subject to service tax. This decision was supported by the dismissal of a Special Leave to Appeal filed by the Revenue against the Bombay High Court judgment.

The High Court, after considering previous judgments and legal precedents, concluded that services provided by a non-resident prior to the insertion of Section 66A were not liable to service tax. This ruling was consistent with a previous case involving Commissioner of Central Excise v. M/s Kansal Hosiery Exports. The Court found no distinguishing features in the present appeals and dismissed them accordingly, in line with the judgment in the Kansal Hosiery Exports case. The Court ordered a copy of the relevant judgment to be included in the current order and placed on the file of connected appeals.

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