2026 (3) TMI 1638

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....hennai (impugned order). The appellant has also filed a miscellaneous application to raise additional grounds of appeal. 2. Based on intelligence, it was alleged that the appellant had rendered 'Commercial or Industrial Construction Service' without registration or payment of service tax for the period October 2005 to March 2008 in respect of construction of the 'K.G. Angamma House Commercial Project' for Shri R. Arvind. The appellant disputed the liability, contending that they are a developer engaged in the construction of commercial buildings and residential complexes. Pursuant to a Joint Development Agreement dated 15.07.2005 with the landowner, Mr. M. Ganesan, the Appellant developed a property known as "K.G. Angamma House", which w....

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....ax liability on builders/developers was introduced for the first time only with effect from 01.07.2010 through the Finance Act, 2010 by inserting Explanations to Sections 65(105)(zzq) and 65(105)(zzzh). These provisions deem services provided by a builder to buyers as taxable only prospectively. Consequently, no service tax liability can arise against developers for the period prior to 01.07.2010. The Ld. Counsel stated that the Tribunal in Krishna Homes v. CCE (2014) 34 STR 881 categorically held that, prior to 01.07.2010, there was no legislative intent to tax construction activities undertaken by builders/developers under agreements with buyers. It was further held that works contracts involving transfer of immovable property became t....

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....to March 2008. 5. The issue is no longer res integra and stands settled by judicial precedent. In Krishna Homes v. CCE [(2014) 34 STR 881], following the Supreme Court's decision in Larsen & Toubro Ltd. v. State of Karnataka [2013 (9) TMI 853 (SC)], the Tribunal held that construction agreements between builders/developers and buyers are works contracts. Such contracts became taxable only from 01.07.2010, upon insertion of the Explanation to Section 65(105)(zzzh). Accordingly, no service tax was leviable prior thereto. Since the disputed period in this appeal, is October 2005 to March 2008, there was no legislative intent to tax the appellant's activities, and the impugned order is liable to be set aside. 5.1 We find that the very sam....