Larger bench not liable to answer when matter already decided by High Court or Supreme Court.

PJ/Case Law/2013-14/2047

Case:-HINDUSTAN AERONAUTICS LTD. Versus COMMR. OF SERVICE TAX, BANGALORE

Citation:-2013 (32) S.T.R. 783 (Tri.- LB)

Brief facts:-In the present appeal , the taxable service in issue is not photography service but repair and maintenance service. The dispute arose in the context of the assessee claiming benefits under Notification No. 12/2003-ST., dated 20-6-2003. While the assessee claims benefits of exemption Notification No. 12/2003-S.T., for excluding the cost of the goods sold or deemed to have been sold to the service recipient; Revenue premised that the benefit of Notification No. 12/2003-ST. must be confined to sale of goods, excluding "deemed sale" i.e. the value of goods incorporated into a composite transaction involving service and sale. This is thecompeting position between the parties which has resulted in the order of reference; and at a point when the decision of the Larger Bench was not pronounced. The Larger Bench in Aggarwal Colour Advance Photo System reported in 2011 (23) S.T.R. 608 (Tri. - LB)answered the reference by holding that;
(a) for the purposes of Section 67 of the Finance Act, 1994 (the Act), the value of services in relation to photography would be the gross amount charged including the cost of goods and materials used and consumed in the course of rendering such service; the cost of unexposed film etc. would stand excluded in terms of Explanation to Section 67, if sold to the client; and
(b) that the value of other goods and material, if sold separately would be excluded under exemption Notification No. 12/2003 and the term 'sold' appearing there under has to be interpreted using the definition of 'sale' in the Central Excise Act, 1944 and not as per the meaning of "deemed sale" under Article 366(29A)(b) of the Constitution.

Appellant’s contention:-Theappellant urged that the Delhi High Court explained the scope of Section 67 of the Act as being limited to ascertaining value of only the service component, wherever complex transactions involving service and sale elements including deemed sale are presented for valuation of a transaction as a taxable service. The appellant has contended in this appeal and other learned counsel for intervenors that the jural bases of both aspects answered by the Larger Bench in Aggarwal Colour Advance Photo Systemis eclipsed by binding authority, of other decisions of Supreme Court and in particular, the decision of the Delhi High Court inG.D Builders.

Respondent’s contention:-The respondent is agreed that the judgment of the Delhi High Court and the other judgments of the Supreme Court which have clarified the distinct locii of taxability of service and of sale of goods in the context of provisions of the Act and of sales tax legislations, considered within the overarching constitutional allocation of discrete legislative powers, to the Union and State legislatures, ought to be considered, without treating the Larger Bench decision in Aggarwal Colour Advance Photo System as providing a quietus to the complex matrix of issues, of taxability of goods and services.

Reasoning of judgment:-After hearing both sides, it is concluded that since it is the submission of the counsel and representatives of the respective parties that the core of the dispute stands settled by higher authority of the Supreme Court and the Delhi High Court, they do not consider necessary to answer the issues referred for our consideration The grievance of the appellant is in the circumstances more appropriately decided by the regular Bench which will now consider all relevant decisions presented for its consideration and resolution. Thus, in the circumstances they decline to answer the reference and rent the appeal, for disposition on merits, to the regular Bench.

Decision:- Answer to reference refused.

Comment:-The analogy that is drawn from this case is that when the issue under dispute stands settled by higher court, the larger bench may refuse to answer the issue that is referred to it and may transfer the matter back to the regular division bench for disposal on merits.

Comments

PJ/Case Law/2013-14/2047

Post a Comment

Query