Total Environment Building Systems Pvt ltd Vs The Deputy Commissioner of Commercial Taxes & Ors (Supreme Court)
Date- 2nd August, 2022
Sub-whether before the introduction of Section 65(105)(zzzza) pertaining to introduction of works contract in the Finance Act, 1994 by the Finance Act, 2007 , service tax could have been levied on the works contracts? Doctrine of Consistency, Doctrine of stare decisis and doctrine of precedents explained in a bunch of appeals.

The Supreme Court in this case was considering in a bunch of appeals the leviability of service tax on the works contracts prior to amendments made by the Finance Act, 2007 even though the issue was settled issue vide decision of the Supreme Court in the case of Commissioner, Central Excise and Customs, Kerala Vs. Larsen and Toubro Limited, (2016) 1 SCC 170. As per the department, the said judgement required to be reconsidered and was not decided correctly. The multiple assesses which were represented by Senior Advocate Arvind Datar argued that as per doctrine of stare decisis if a decision which has been already followed by number of high courts and tribunal including Supreme Court itself is unsettled at this stage, it will upset all those decisions. The Court finally elaborately dealt with the principle of stare decisis, consistency and precedents and refused to interfere particularly in view of the fact that the department since the decision in the Larsen and Toubro was announced and followed by courts and tribunals has not challenged those decisions. While Justice M R Shah did not deal with the merits of the matter but Justice Nagarathna decided to deal elaborately on the merit also.

This judgement which otherwise is of academic importance will be helpful in applying principles of stare decisis, consistency and precedents.

Ramesh Patodia
02-08-2022