The division bench of the Punjab and Haryana High Court, recently in Commissioner Service Tax v. DLF Golf Resorts, dismissed an appeal preferred by the Revenue on the ground that the matter was relating to the taxability of services and the appeal is not maintainable before the High Court in view of Section 35G of the Central excise Act, 1944 which also applicable to Finance Act, 1994.
The respondent-assessee holds service tax registration as a Mandap Keeper, Health Club and Fitness Centres and Manpower Recruitment services. The Department raised service tax demand from the assessee for the services charged from members of clubs for various services, which is according to the Department is within the scope of the word “any other amount” as defined in Section 65 (105) (zzze) read with Section 65 (25a) of the Finance Act, 1994.
The respondent denied the liability towards such services on the basis of the doctrine of mutuality as well as on the ground that these provisions have been declared ultra vires by the Gujarat High Court in the case of Sports Club of Gujarat Ltd. Vs. Union of India.
Before the High Court, the respondent took a preliminary issue with regard to the maintainability of the issue and contended that in view of Section 35L of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994, these issues can be decided only by the Supreme Court and not by the High Court in an appeal under Section 35G.
Aligning with the above contention, the High Court observed that an amendment was made to section 107 of the Finance Act, 2014 to the effect that disputes relating to the taxability or excisabilty of of services would lie before the Supreme Court only.
Later, in the case of CST Vs. Gecas Services India Pvt. Ltd., the division bench of the delhi High Court clarified that the provision is applicable in case of matters relating to service tax also.
“It is, therefore, evident that the department has considered the amendment to be clarificatory and has proceeded on that basis, inter alia, by withdrawing various proceedings before the Supreme Court. The controversy as to whether the issues such as the one raised in the present appeal relates to taxability or not, is now set at rest including by the department. We are informed that similar questions are, in fact, pending before the Supreme Court.” Accordingly, the bench dismissed the departmental appeal on ground of maintainability.
Read the full text of the Judgment below.
