2016 (12) TMI 1469

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....olding company for undertaking franchise business in India. For providing the above services, the appellant got itself registered with the Service Tax Department under the taxable category of 'Management or Business Consultant's services'. As consideration for providing such service, the appellant receives service fee and discharges appropriate service tax liability on the basis of receipt of payment from the holding company. During the financial years 2006-07 and 2007-08, the appellant had booked service fees of Rs. 3,28,00,378/- receivable from the holding company in its books of accounts, but did not pay the service tax since the said amount was not received by it during such period. However, on the basis of book entry made b....

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....dings recorded in the impugned order. 4. Heard both sides and perused the records. 5. The short question involved in this appeal for consideration is, as to whether, the amendment in Rule 6 ibid is retrospective or prospective and whether it would apply to the outstanding balance available as on 10.05.2008 or only prospective in respect of entries made in the books of accounts post 10.05.2008. 6. As per Rule 6(1) ibid, as existed prior to 10.05.2008, service tax was required to be paid by the 5th/ 6th day of month immediately following the calendar month in which the payments were received towards taxable services. The said rule was amended vide Notification No.19/2008-ST, dated 10.05.2008, by inserting the following explanation:- "Exp....

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....ibid will have retrospective effect, in our view, defeats the legislative intent and also against the principles of legal jurisprudence. 9. The basic principle for ascertaining the retrospectivity of a legislation is the principle of 'fairness'. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability, have to be treated as prospective, unless the legislative intent is clear to give the enactment a retrospective effect. Further, an explanatory legislation is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous provisions of the legislation. 10. Payment of service tax in respect of transactions between associated en....