COMMISSIONER, CENTRAL EXCISE & CUSTOMS, KERALA versus M/S LARSEN & TOUBRO LTD.

COMMISSIONER, CENTRAL EXCISE & CUSTOMS, KERALA versus M/S LARSEN & TOUBRO LTD.

Service tax could not have been levied under Finance Act, 1994 on composite indivisible works contracts prior to introduction of Finance Act, 2007, as the Act did not lay down specific charge or machinery for such tax.

Parties
Appellant: Commissioner, Central Excise & Customs, Kerala; Respondent: M/s Larsen & Toubro Ltd.
Jurisdiction
India
Judgment Date
20 August 2015
Procedural Posture
Civil Appeal / Final Supreme Court Decision
Outcome
Appeals of assessees allowed; appeals of revenue dismissed.
Legal Topics
Service Tax, Works Contract, Statutory Interpretation, Taxing Statutes, Legislative Competence
Taxation Constitutional Law Contract Law Service Tax Works Contract Statutory Interpretation Taxing Statutes Legislative Competence

Case Brief

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Parties

Commissioner, Central Excise & Customs, Kerala

Appellant

M/s Larsen & Toubro Ltd.

Respondent

Procedural Posture

Civil Appeal / Final Supreme Court Decision

Legal Issues

  1. 1 Whether service tax was leviable on indivisible works contracts prior to the introduction of Finance Act, 2007
  2. 2 Legislative competence of Parliament and States to levy tax on works contracts
  3. 3 Whether the Finance Act, 1994 provided machinery for assessment of service tax on composite contracts

Ratio Decidendi

Service tax could not have been levied under Finance Act, 1994 on composite indivisible works contracts prior to introduction of Finance Act, 2007, as the Act did not lay down specific charge or machinery for such tax.

Court Disposition

Appeals of assessees allowed; appeals of revenue dismissed.

Orders

  • Service tax not leviable on composite indivisible works contracts prior to Finance Act, 2007; all appeals of assessees allowed; all appeals of revenue dismissed; exemption notifications disregarded as levy was non-existent.