RAINBOW DENIM LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) This writ petition has been filed challenging the explanation to Section 65 (105) of the Finance Act, 1994 (for short "the 1994 Act") added vide Finance Act, 2005. According to the said explanation, where any service provided or to be provided by a person, who has established a business or has a fixed establishment from which the service is provided or to be provided, or has his permanent address or usual place of residence, in a country other than India and such service is received or to be received by a person who has his place of business, fixed establishment, permanent address or, as the case may be, usual place of residence, in India, such service shall be deemed to be taxable service for the purposes of this clause. Vide notification issued under Section 68 of the 1994 Act, the person receiving services in India was made liable to service tax in respect of service rendered by person not having any office or establishment in India. Contention raised in writ petition is that if this explanation is interpreted to include services rendered outside India, the same will be unconstitutional.

(2.) Learned Counsel for the parties points out that the said explanation now stands deleted but dispute for the period prior to deletion stands, though no assessment has been done so far.

(3.) We are of the view that the contention requires consideration.