2018 (10) TMI 220 - HC - Service Tax

Court grants relief in challenging service tax collection for residential flat construction

The Court, following precedent in Suresh Kumar Bansal, found the petitioners entitled to relief in challenging service tax collection for residential flat ... Levy of Service Tax - construction of residential flat - The Court by its judgment in Suresh Kumar Bansal & Ors. v. UOI & Ors. [2016 (6) TMI 192 - DELHI HIGH COURT], upheld the contention and declared Section 65(105)(zzzh) as unconstitutional - Held that:- Having regard to the judgment in Suresh Kumar Bansal, the petitioner is clearly entitled to relief. Respondents shall process the petitioners claim on the basis of the documents – particularly the remittance/payments made to the builder (respondent No.2) at relevant times; having regard to the invoices raised as well as the bank accounts statement in this regard - petition allowed. Issues: Challenge to service tax collection for construction of residential flat under Section 65(105)(zzzh) of the Finance Act, 1994 & explanation to Section 65(105)(zzzzu) being ultra vires. Entitlement to relief for amounts collected.The judgment addresses the challenge raised by the petitioners against the collection of service tax for the construction of residential flats under Section 65(105)(zzzh) of the Finance Act, 1994, and the explanation to Section 65(105)(zzzzu) being ultra vires. It references a previous judgment in Suresh Kumar Bansal & Ors. v. UOI & Ors. (2016) where the Court declared Section 65(105)(zzzh) as unconstitutional and directed refunds to individual flat owners. The current petitioners claim similar relief as service tax charges were collected under the same provision. The builder/service tax provider, impleaded as the second respondent, did not respond to the notice issued.Considering the precedent set in Suresh Kumar Bansal, the Court finds the petitioners entitled to relief. The Court directs the respondents to process the petitioner's claim based on relevant documents, including remittance/payments made to the builder (respondent No.2), invoices raised, and bank account statements. The Official respondent/Commissioner of Service Tax/GST is tasked with eliciting the builder's statement through summons, verifying particulars, and issuing a refund order to remit necessary amounts to the petitioner within four months. The Commissioner of Service Tax/GST (East Zone) is instructed to issue notices to both parties within two weeks to facilitate the process.The writ petition is allowed, granting relief to the petitioners as per the terms outlined in the judgment. The order is dasti to both parties, ensuring compliance with the directions provided by the Court for the refund process within the specified timeline.