Custom, Excise & Service Tax Tribunal
Dau Singh Sisodia vs Udaipur on 8 January, 2026
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH-COURT NO. 3
SERVICE TAX APPEAL NO. 53551 OF 2018
[Arising out of Order-in-Appeal No. UDZ-EXCUS-CUS-000-APP-844-
2018 dated 02.08.2018 passed by the Commissioner (Appeals), Central
Excise, GST, Jodhpur]
M/S DAU SINGH SISODIA ......APPELLANT
3/349, Rajasthan Housing Board,
Sector No. 14, Goverdhan Vilas,
Udaipur, Rajasthan
Vs.
COMMISSIONER OF CGST & CENTRAL
......RESPONDENT
EXCISE-UDAIPUR Appearance:
Shri Prashant Srivastava, Advocate for the Appellant Shri S.K. Meena, Authorised Representative for the Respondent CORAM:
HON'BLE DR. RACHNA GUPTA, MEMBER ( JUDICIAL ) HON'BLE MR. P. V. SUBBA RAO, MEMBER ( TECHNICAL ) FINAL ORDER NO. 50032 /2026 DATE OF HEARING : 16/10/2025 DATE OF DECISION : 08/01/2026 P.V.SUBBA RAO
1. Shri Dau Singh Sisodia1 filed this appeal to assail the order-
in-appeal dated 02.08.2018 passed by the Commissioner(Appeals) Central Excise & CGST, Jodhpur in which he upheld the order-in-original dated 23.02.2017 passed by the Deputy Commissioner and rejected the appellant's appeal. The Deputy Commissioner had, in his order-in-original, decided the proposals made in two show cause notices dated 16.04.2015 1 Appellant 2 (covering the period 2013-14) and 17.03.2016 (covering the period 2014-15) and confirmed a demand of Rs. 15,39,755/- as service tax and also imposed penalty of Rs. 1,53,008/- under section 76 of the Finance Act, 19942.
2. We have heard the learned counsel for the appellant and the learned authorized representative appearing for the department and perused the records.
3. The appellant had a service tax registration under the category of 'Work Contract Service' and was providing 'Work Contract Services' to Rajasthan Housing Board, Udaipur but did not pay any service tax on these services. According to them these services were exempted under Sr. no. 12 of Exemption Notification No. 25/2012-ST dated 30.06.2012 as the services provided to Rajasthan Housing Board were services provided to a governmental authority. Earlier, two SCNs dated 20.10.2011 and 16.05.2014 had been issued to the appellant by the department.
The SCNs herein are for the subsequent periods. The grounds taken in this appeal are that the appellant was covered by Exemption Notification No. 25/2012-ST dated 20.06.2012 (Sr. No. 12A), as the services provided to Rajasthan Housing Board are exempted being services provided to government authority.
4. Learned counsel for the appellant had also submitted during hearing that the demand in respect of the previous period was dropped by the Commissioner of CGST, Udaipur by order 2 Act 3 dated 30.09.2025. He, therefore, prayed that this demand may also be set aside.
5. Learned authorized representative for the Revenue submitted that the demand dropped by the Commissioner by order dated 30.09.2025 pertained to the pre-negative list period during which only services which fell under category of taxable services could be charged to service tax. Construction of residential complex was a taxable service during the relevant period. The definition of residential complex has been held to not include individual houses built as a part of a complex in a series of decisions. Accordingly, the Commissioner dropped the demand.
6. Insofar as this period is concerned, learned authorized representative appearing for the department submits that this appeal pertains to post-negative list period in which any service rendered was exigible to service tax unless the service fall under the negative list or was or otherwise exempted by any Exemption Notification. It is the case of the appellant that the services were exempted by Notification No. 25/2025(12A). Learned authorized representative submits that it has already be decided by this Tribunal in ST/51298/2016, M/s A.S. Construction Company Limited vs. Commissioner of Central Excise & Service Tax, Udaipur, by Final Order No. 50456 of 2025 dated 01.04.2025 that Rajasthan Housing Board does not qualify as a governmental authority. He, therefore, prayed that the impugned order may be upheld and the appeal may be dismissed.
47. We have considered the submissions advanced by both sides and perused the records.
8. Service tax was introduced by Finance Act, 1994. Initially, service tax was chargeable on the value of taxable services rendered. Taxable services have been defined under various clauses of section 65 (105) of the Act. These included construction of residential complex services. From 01.07.2012 the law was substantially amended and all services except those in the negative list became exigible to service tax. It is not the case of the appellant that the services rendered by it were under the negative list. The case of the appellant in this appeal is that it was entitled to the benefit of the exemption notification no.
25/2012-ST (Sr. No. 12 and 12A) as the service recipient, Rajasthan Housing Board was a governmental authority.
9. Learned counsel for the appellant also placed on record the order dated 30.09.2025 passed by the Commissioner CGST, Udaipur in respect of the same appellant in respect of the previous SCNs wherein he dropped the demand of service tax.
10. We find that the order of the Commissioner dropping the demand pertained to the pre-negative list period. During that period only taxable services could be charged to service tax.
Construction of residential complex was one of the taxable services. The definition of residential complex at that time has been held to not include individual houses but only buildings with 12 or more residential units. It is for this reason, the Commissioner has dropped the demand.
511. We are now concerned with post-negative list period in which any service rendered is taxable unless which is under the negative list or is exempted. The claim of the appellant is that the services were exempted as they were rendered to Rajasthan Housing Board which is a governmental authority. In A.S. Construction Company Limited, this Tribunal held as follows:
9. To appreciate the contention that have been advanced it would be appropriate to examine the Exemption Notification dated 20.06.2012. It exempts the taxable services mentioned therein from the whole of the service tax leviable thereon under section 66B of the Finance Act. At Serial No.
12 services provided to the government, a local authority or a government authority by way of construction or erection commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of structures are mentioned.
10. The appellant has placed emphasis on the fact that Rajasthan Housing Board is a 'governmental authority'. 'Governmental authority' has been defined in (s) of the Exemption Notification dated 20.06.2012 in the following manner:
"(s) "governmental authority " means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W of the Constitution;"
11. The aforesaid definition of 'governmental authority' was amended by Notification No. 2/2014 dated 30.01.2014 and it is as follows:
"(s) "governmental authority" means an authority or a board or any other body;
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by Government, with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution."
12. The period involved in this appeal is from 01.04.2013 to 31.03.2014. Thus, clause (s) as it stood when the Exemption Notification was issued on 20.06.2012, and as it stood when it was amended on 30.01.2014 would be relevant.
613. Learned counsel for the appellant has placed reliance upon the decision of the Supreme Court in Shapoorji Pallonji. This decision interpreted the amended clause (s) of the Exemption Notification, which amendment came into effect w.e.f. 30.01.2014. The Supreme Court placed emphasized on the 'semicolon' and 'comma' used in the amended definition and observed that the conjunction 'or' between sub-clauses (i) and (ii) divides the clauses into two parts and, therefore, both the parts would be independent of each other. Thus, a 'governmental authority' would mean either an authority or a board or any other body set up by an Act of the Parliament or a State Legislature or an authority or a board or any other body established by government, with 90% or more participation by way of equity or control by the Government, to carry out any function entrusted to a municipality under article 243W of the Constitution.
14. It would, therefore, have to be examined whether either of the two conditions is satisfied by Rajasthan Housing Board.
15. Rajasthan Housing Board has not been set up by an Act of a State Legislature. This is clear from the State Act. Section 4 deals with the establishment of the Rajasthan Housing Board. It provides that the State Government may, by the notification in the official gazette, establish, for the purposes of the Act, a board to be called, the Rajasthan Housing Board with effect from such date as may be specified in the notification. The State Government had, therefore, to issue a notification in the official gazette to establish the Rajasthan Housing Board and indeed such a notification was issued by the State Government. The Rajasthan Housing Board has not been constituted or set up by a State Act.
16. The appellant is, therefore, not justified in placing reliance upon (i) of clause (s) to contend that the Rajasthan Housing Board would be a 'governmental authority' because Rajasthan Housing Board has not been set up by a State Legislature. The notification itself distinguishes between a board set up by an Act of a State Legislature or a board established by the State Government. Thus, for the period w.e.f. 30.01.2014 the appellant cannot contend that the Rajasthan Housing Board is a 'governmental authority'.
17. Thus, (ii) of clause (s) would be relevant in such a situation. It was, therefore, for the appellant to substantiate that the Rajasthan Housing Board was established by the government with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution but the appellant did not do so and merely relied upon (1) of clause
(s).
18. What remains to be examined is whether Rajasthan Housing Board would be a 'governmental authority' under the unamended notification dated 20.06.2012. This unamended clause (s) is more or less the same as (ii) of clause (s) of the amended definition. It again emphasises that the board must be established with 90% of more participation by way of equity or control by the Government.
719. As noticed above, the Rajasthan Housing Board has been established under a State Act and has not been set up by an Act of the State Legislature.
20. The appellant did not lead any evidence to substantiate that the Rajasthan Housing Board was established by the State Government with 90% or more participation by way of equity or control by the Government, to carry out any function entrusted to a municipality under article 243W of the Constitution.
21. There is, therefore, no error in the order dated 27.01.2016 passed by the Commissioner holding that Rajasthan Housing Board is not a 'governmental authority'.
22. The appeal, therefore, deserves to be dismissed and is dismissed."
12. We find no reason to take a different view in this case.
Respectfully following AS Construction, we find impugned order needs to be upheld.
13. The impugned order is upheld and the appeal is dismissed.
[Order pronounced on 08/01/2026] (DR. RACHNA GUPTA) MEMBER ( JUDICIAL ) (P. V. SUBBA RAO) MEMBER ( TECHNICAL ) Tejo