VISTAR CONSTRUCTION (P) LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) These writ petitions are being disposed of together as they raise common issues. Both the writ petitions are directed against the instruction dated 28.04.2008 issued by the Tax Research Unit, Department of Revenue, Ministry of Finance, Government of India purportedly in exercise of the powers under Section 37B of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. The petitioners in these writ petitions challenge the said instruction on the ground that it is contrary to the law as declared by the Supreme Court.

(2.) The main issue in these writ petitions is with regard to the applicability of the rate of service tax in respect of the Works Contract Service which is defined in Section 65(105)(zzzza) of the Finance Act, 1994. The case of the petitioner is that the said services were rendered prior to 01.03.2008 when the rate of service tax on the said service was increased from 2% to 4%. It is an admitted position that the services were rendered prior to 01.03.2008 as would be apparent from the counter affidavit in WP(C) 5636/2010 wherein, in reply to ground F, interalia, the following is stated :-

(3.) It is the case of the respondents that by virtue of the impugned instruction dated 28.04.2008, the rate of service tax is to be determined based on the date of receipt of payment and not on the date of rendition of service.