Smt. Vaani Kapoor & Anr vs. The Commissioner Of Service Tax & Anr.

Held

The Court held that the petitioners are clearly entitled to relief, referencing the judgment in Suresh Kumar Bansal & Ors. v. UOI & Ors. (2016). The reasoning is that the levy under Section 65(105)(zzzh) has already been declared unconstitutional by this Court in the cited precedent. The ratio decidendi is that once a provision is declared unconstitutional, any collection made thereunder is illegal and refundable. The Court directed the respondents to process the petitioners' claim based on documents like payments made to the builder, invoices, and bank statements. The Commissioner of Service Tax/GST was ordered to elicit the builder's statement through summons, verify particulars, and then issue a refund order. The entire process is to be completed within four months, with notice to the petitioner and builder to be issued within two weeks.

Facts

The petitioners, Smt. Vaani Kapoor & Anr., challenged the levy of service tax on the construction of a residential flat under Section 65(105)(zzzh) of the Finance Act, 1994, and the explanation to Section 65(105)(zzzzu), deeming them ultra vires. They sought relief identical to that granted in a previous case, Suresh Kumar Bansal & Ors. v. UOI & Ors. (2016), where Section 65(105)(zzzh) was declared unconstitutional and directions were issued for the refund of collected amounts. The builder/service tax provider was impleaded as the second respondent but did not respond. The Court considered the prior judgment in Suresh Kumar Bansal.

Key Issues

1. Whether Section 65(105)(zzzh) of the Finance Act, 1994, is unconstitutional and ultra vires, as contended by the petitioners, based on the precedent set in Suresh Kumar Bansal & Ors. v. UOI & Ors. (2016)? 2. Whether the petitioners are entitled to a refund of service tax collected from them for the construction of their residential flat, similar to the relief granted in Suresh Kumar Bansal? Petitioner's Arguments: The petitioners argued that they are entitled to the same relief as granted in Suresh Kumar Bansal, as amounts were collected from them for service tax charges under Section 65(105)(zzzh), which was declared unconstitutional in the aforementioned case. Revenue/State's Arguments: The judgment records no specific arguments from the revenue or state respondents. The builder/service tax provider, impleaded as the second respondent, also did not respond.