Case Law Details
Principal Commissioner Of Service Tax Vs IBM India Pvt. Limited (High Court of Karnataka)
Respondent is engaged in providing services with regard to maintenance and repair of computer software. Vide Notification dated 21.08.2003, the maintenance services related to computers, computer systems or computer peripherals were exempt from payment of service tax. The Central Board of Direct Taxes (CBDT) issued a circular dated 17.12.2003 by which it was clarified that the maintenance of repair of computer software would not be liable to service tax inasmuch as the same does not amount to maintenance or repair of tangible goods. The Notification dated 21.8.2003 was withdrawn by a Notification dated 09.07.2004 and thereafter, the liability to pay service tax to services relatable to maintenance and repair of computer software were made effective from 01.06.2007.
The tribunal vide order dated 23.07.2015 by placing reliance on decision of the Madras High Court held that software maintenance is exigible for levy of service tax only with effect from 01.06.2007 whereas, the period in question is from 09.07.2004 to 06.10.2005.
Admittedly as per the stand taken by the respondent themselves before the High Court of Madras, it is evident that activity of maintenance of computer software was exempt from the provisions of the Act prior to 2006. We are in agreement with the view taken by the High court of Madras. It is pertinent to mention here, that in the show cause notice itself no allegations of fraud collusion, misstatement or suppression of facts have been stated against the respondent, therefore, the demand is barred by limitation under Section 73 of the Finance Act, 1994 as well. For the aforementioned reasons, the substantial questions of law are answered in against the appellant and favour of the respondent.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
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