In a recent judgment, the Hon’ble Delhi High Court, bench of Justice S. Muralidhar and Justice Vibhu Bakhru, in the matter of Suresh Kumar Bansal v. Union of India & Ors. [W.P. (C) 2235/2011] has set aside the provision of Section 65(105)(zzz) of the Finance Act,1994, which includes “taxable service” provided to any person, by any another person “in relation to construction of complex” within the ambit of service tax.

The Hon’ble High Court struck down the provisions observing that neither the Act nor the Rules framed therein provide for a machinery provision for excluding all components other than service components ascertaining the measure of Service Tax. The abatement to the extent of 75% by a notification or a circular cannot substitute the lack of statutory machinery provisions to ascertain the value of services involved in a composite contract.

The Hon’ble High Court also directed that amount deposited shall be refunded with interest @ 6 per cent from the date of deposit till the date of refund (applies to flats purchased before July 01, 2012).