GOLDEN CONSTRUCTIONS Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) THE appellant was engaged in the promotion and construction of residential complexes for sale to prospective customers. They were procuring land from land owners and constructing residential flats. They were obtaining the necessary permission from different authorities concerned like MMDA, appointing Architects, structural engineers, etc. They were also advertising and canvassing the prospective buyers to purchase flats and after identifying prospective buyers they were entering into two separate agreements with such prospective buyers.

(2.) THE main argument of the ld. Counsel for the applicant is that when the construction activity was done the land was still in the name of the applicant and therefore at that stage there was no relationship of service provider and service recipient between the applicant and the prospective buyers and the construction activity was done for the benefit of applicant itself and hence the demand for service tax is not maintainable. The Counsel for the applicant relies on the following circulars issued by the C.B.E. & C. in support of his argument.

(3.) THE Counsel further submits that the adjudicating authority has decided the case based on the general practice in southern states, that is, of first registering the UDS in the name of prospective buyers and then constructing flats. The applicant was not following such general practice but was registering UDS only after the construction was completed and hence he argues that the demand is confirmed based on reasoning not applicable to the facts of the case of applicant.