A division bench of the Gujarat high court, headed by chief justice SJ Mukhopadhaya, has issued notices to the Union finance ministry and service tax department, with regards to a petition filed, seeking to withdraw service tax on construction of residential, industrial and commercial properties.
The next hearing in the case, as fixed by the high court bench, is slated for December 23.
One V Square Projects Ltd has filed a petition through its counsels Saurabh Soparkar and Mahesh Bhavsar. The counsels contended in the petition that the service tax department has imposed service tax on the transaction of immovable properties by the consumers from builders, by making amendments in the Finance Act, 1994.
Actual service tax is unconstitutional on such transactions, as it is does not come under the definition of ‘service’, but is actually selling of property. Therefore, service tax cannot be imposed upon it. It is a preferential transaction by buyers, and it is unconstitutional as well as illegal if service tax is imposed over it.