2010 (1) TMI 616

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.... 3. The petitioner a Government contractor entered into some agreements/contracts with the respondent No. 1 for construction of residential complex. Undisputedly, there were no terms in the agreement/contract that the Service Tax would be paid either by the petitioner or by the respondent No. 1. It appears that after the execution of the contract was over, the respondent no. 2 issued notices to the petitioner to deposit the service tax. The petitioner, being aggrieved by the said demand, placing reliance upon the resolution/subject No. 12 taken up by the Board of Directors of respondent No. 1 on 23-10-2009, has come to this Court with a submission that if the respondent No. 1 has resolved that in the matters where there was no conditi....

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....d as in this case the services are being provided by the petitioner, he is to be held liable. In relation to subject No. 12 and its implementation, it is submitted by him that even after passing the said resolution, the respondent No. 1 cannot be held liable to pay tax. It is further submitted that a review of subject No. 12 is in offings because the said resolution runs contrary to the provisions of law. His submission is that present is a matter relating to contract and the liability of the parties under the contract, therefore, this Court should not interfere in the matter. 7. We have heard the parties at length and have gone through the Annexure-P/3. Undisputedly, under Section 19 of the Finance Act, in the matters of the commerci....

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....contract which he is not entitled. Once it is held that there is no agreement or contract between the parties that the respondent No. 1 shall pay the amount of sales tax either to the petitioner or to the respondent No. 2 then petitioner's submission that the respondent No. 1 is still liable to pay because of the subject No. 12 would be something contrary to law. 11. Learned counsel for the petitioner has also placed strong reliance upon the judgment of the Supreme Court in the matter of All India Federation of Tax Practitioners and others v. Union of India and others reported in (2007) 7 SCC 527 = 2007 (7) S.T.R. 625 (S.C.). Learned counsel for the petitioner has placed strong reliance upon paragraphs No. 6, 7 and 22 of this Judgme....

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....above, as an economic concept, there is no distinction between the consumption of goods and consumption of services as both satisfy human needs. It is this economic concept based on the legal principle of equivalence which now stands incorporated in the Constitution vide the Constitution (Eighty-eighth Amendment) Act, 2003. Further, it is important to note, that "service tax" is a value added tax which in turn is a general tax which applies to all commercial activities involving production of goods and provision of services. Moreover, VAT is a consumption tax as it is borne by the client.'' After going through the said paragraphs and the context in which the judgment has been delivered by the Supreme Court, we are unable to hold that thi....