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8 The learned Senior Counsel contended that the "Total amount"

has been defined in the Explanation provided in the impugned notification and by deeming fiction, though there is a separate and identifiable value of land, only 1/3rd amount of the total amount is C/SCA/1350/2021 CAV JUDGMENT DATED: 06/05/2022 given towards abatement. It is averred that the liability sought to be fixed by way of deeming fiction so as to presume only 1/3rd of total consideration towards land is ultra-vires the provisions of the GST Acts.

96 The answer has to be in the negative. When the statutory provision requires valuation in accordance with the actual price paid and payable for the service and where such actual price is available, then tax C/SCA/1350/2021 CAV JUDGMENT DATED: 06/05/2022 has to be imposed on such actual value. Deeming fiction can be applied only where actual value is not ascertainable.

97 Such proposition is squarely supported by the judgement of the Supreme Court in the 2nd Gannon Dunkerley's case. At that point of time only the goods element of the construction contract was taxable and therefore deduction was required to be given for labour element. In this context it was held and observed that if actual labour value was available then the same was to be deducted and if in case actual value was not ascertainable then deeming fiction could be applied which was required to be approximate to the actual value. Relevant observations of the Supreme Court read thus:

 ARBITRARINESS OF THE DEEMING FICTION BY THE IMPUGNED NOTIFICATION:

101 Apart from being contrary to the statutory provisions contained in the CGST Act, one of the most glaring feature of the C/SCA/1350/2021 CAV JUDGMENT DATED: 06/05/2022 impugned deeming fiction is its arbitrariness in as much as the same is uniformly applied irrespective of the size of the plot of land and construction therein. Two illustrations may be taken:

105 Such deeming fiction which leads to arbitrary and discriminatory consequences could be clearly said to be violative of Article 14 of the Constitution of India which guarantees equality to all and also frowns upon arbitrariness in law.

 ARBITRARY DEEMING FICTION HAS LED TO MEASURE OF TAX HAVING NO NEXUS WITH CHARGE:

106 The arbitrary deeming fiction by way of delegated legislation has led to a situation whereby the measure of tax imposed has no nexus with the charge of tax which is on supply of construction C/SCA/1350/2021 CAV JUDGMENT DATED: 06/05/2022 service. It is well established that the measure of tax should have nexus with the charge of tax. Reference may be made to the judgement of the Supreme Court in the case of State of Rajasthan v/s Rajasthan Chemists Association (2006) 6 SCC 773 wherein the following was observed after considering the dictum of the Supreme Court in the case of Govind Saran Ganga Saran v/s CST: