AI Drafter 
TaxTMI 
TaxTMI 
2025 (7) TMI 1262
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....rs. Alleging that the interest cost that would have accrued to the appellant on such maintenance deposit or the actual expenses incurred by them whichever is higher has to be adopted as taxable value as per Rule 3(b) of Service Tax (Determination of Value) Rules, 2006 read with Rule 5 under the category of 'Management, Maintenance or Repair Service'. Thereafter, adjudicating authority held that as per the evidence on record levy falls under the category of Section 65(64)(i)(b) of the Finance Act, 1994. Taxable service in respect of the said category in terms of Section 65(105)(zzg) ibid means any service provided or to be provided, to any person, by any person, in relation to management, maintenance or repair. From the records, it was found that M/s. Sobha had declared such expenses to the tune of Rs.6,60,69,489/- incurred by them by means of adjustment from the notional interest calculated on the corpus of Maintenance deposit, during the period 2011-12 in their ST-3 return and had discharged service tax thereon, they had failed to discharge service tax on certain expenses amounting to Rs.54,74,53,689/- which were also incurred by them by means of adjustment from the notional inter....
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....mpugned order. 4. Heard both sides. The issue is no more res integra and as per the decision of this tribunal in the matter of Ballal Developers (supra) wherein it was held that: 5.1. Coming to the first issue, we find that learned Commissioner held that the appellant has collected sums from the buyers before the receipt of the occupancy certificate/completion certificate and therefore provided taxable service as per Section 65(105) (zzzh) of the Finance Act 1994. He also relied upon the Board Circular 151/2/2012-ST dated 10.02.2012. He has also relied upon judgment of Punjab & Haryana High Court in the case of M/s. GS Motors - 2011 (21) S.T.R 100 (P&H) and judgment of Bombay High Court in the case of Maharashtra Chamber of Housing Industry - 2012 (25) S.T.R. 305 (Bom.). We find that vide above judgments the Hon'ble High Courts have held the validity of levy of service tax. However, as submitted by the counsel for the appellants, Delhi High Court in the case of Suresh Kumar Bansal (supra) have held that "52. It was stated that an assessee is entitled to abatement to the extent of 75% and only 25% of the gross amount charged by a builder from a flat buyer is cha....
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....y so when it relates to taxing law. It is a well-settled principle that in matters of taxation either the statute or the Rules framed under the statute must cover the entire field. Taxation by way of administrative instructions which are not backed by any authority of law is unreasonable and is contrary to Article 265 of the Constitution of India. Therefore, the impugned circulars are set aside as also the impugned orders of assessment. The assessee's liability to pay tax remains but in order to assess that the State has to act in accordance with the statutory prescription by framing Rules under its rule-making power under Section 29 of the Act and the assessing authority can pass fresh orders of assessment on the basis of such statutory Rules." 53. As noticed earlier, in the present case, neither the Act nor the Rules framed therein provide for a machinery provision for excluding all components other than service components for ascertaining the measure of service tax. The abatement to the extent of 75% by a notification or a circular cannot substitute the lack of statutory machinery provisions to ascertain the value of services involved in a composite contract. 5....
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.... the owners of the flats, thereafter the title of land etc. is passed on to the Flat Owners Co-operative Housing Society. The appellants are recovering a one time maintenance deposit from each of the customers to whom they have sold the flats. The said amount is kept in a separate bank account as fixed deposit. From the interest earned on the said deposit, the appellants are expected to pay for various charges such as common electricity bill, water charges, security charges, etc. After the flat owners co-operative housing society is formed, whatever balance is left in the said bank account the same is handed over to the Flat Owners Co-operative Housing Society. In the impugned order Service Tax has been demanded on the deposits made by various purchasers of the flats on the ground that the appellants are providing "Maintenance or Repair" service falling under Section 65(64) and Section 65(105)(zzg) of the Finance Act, 1994. xxxx 6. At the outset, we note that Circular and case laws quoted are not relevant to the present issue as services and situations context discussed are totally different. We find that as per the agreement submitted by the appellants, certain a....
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....ht to the notice of the State Government that, consequent on the acute shortage of housing in several areas of the State of Maharashtra, sundry abuses, malpractices and difficulties relating to the promotion of construction, and the sale and management and transfer of Flats taken on ownership basis exist and are increasing. That is why the Government decided to appoint a Committee to advice it and that Committee inquired into and reported to the State Government on several matters referred to aforesaid with the purpose of considering measures for their amelioration. Then, the report of the Committee was published for general information and after considering its recommendations and suggestions, it was decided to make provision during the period of such shortage of housing, for the regulation of the promotion of the construction, sale and management and transfer of Flats taken on ownership basis in the State of Maharashtra. xxxx 27. The deposit or the monies themselves are held and appropriated towards payment of taxes, etc., popularly known as outgoings. The building and the Flats therein has to stand intact till all the Flats or units are sold and the statutory o....