SUNDERDAS GIANCHAND Vs. JABALPUR DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) Calling in question tenability of a resolution dated 6.3.2010 passed by the Jabalpur Development Authority in the matter of payment of service tax by the petitioners; these writ petitions have been filed. As the common questions of law and fact are involved in all the four petitions, they are being decided by this common order. For the sake of convenience, the pleadings and documents available in W.P.No.12506/2010 are being referred to in this order. Petitioners in all the cases are Contractors and they were awarded certain contract by the Jabalpur Development Authority with regard to certain construction work.

(2.) Agreement was entered into and when the petitioners started discharging their duties in accordance to the agreement, it seems that a question arose with regard to payment of service tax. When, notices were issued by the Revenue in the matter of recovery of service tax, it seems that the matter was taken up between the petitioners and Jabalpur Development Authority, and the Jabalpur Development Authority passed a resolution on 23.10.2009 vide Annexure-P/3 being resolution No.12. Based on certain opinion given by the senior counsel for the authority, the Jabalpur Development Authority decided that in the matter of payment of service tax as there is no provision in the agreement, it was decided that the component of service tax shall be added in the cost of construction to be done and thereafter, it shall be transferred to the ultimate beneficiary who will get the benefit of the work done by the Contractor as per the agreement entered into with the contractor. Accordingly, it is the case of the petitioners, and Shri Amalpushp Shroti emphasizes that the petitioners were absolved of the liability for making payment of service tax and it was decided by the Jabalpur Development Authority that the same shall be recovered from the ultimate persons who are beneficiaries of the construction and to whom the constructed building is finally transferred. It was stated that the amount of service tax shall be added to the cost of construction and recovered from the persons who reached the benefit of the construction done. It is submitted that inspite of the aforesaid agreement when the service tax was being recovered by the revenue, the matter came to this Court at the instance of the petitioners and a Division Bench of this Court decided the matter by a common order passed on 29.01.2010 in W.P.No.13410/ 2009 (O) and various other cases, also reported in 2011 (22) S.T.R. 5 (M.P.).

(3.) In the order passed by the Division Bench, it was held that the petitioners as contractor were under the law are obliged and duty bound to make payment of the service tax and as far as inter se dispute between the petitioners and Jabalpur Development Authority was concerned, certain liberties were was granted to the petitioners and with regard to the same, the learned Division Bench on 29.01.2010 in W.P.No.13410/09 (O), gave the following observations and directions :-