Supreme Court upholds L H Sugar
Service Tax on goods transport had a bumpy ride all through. In Laghu Udyog, the Supreme Court had struck down the tax on the service receiver instead of the service provider. But Government was not to relent. Several retrospective amendments were brought in the Act to collect the tax for a few months. This retrospective legislation was challenged in the Supreme Court and the Apex Court upheld the Parliament’s right to undo a Supreme Court judgement by proper legislation. In the meanwhile, the Tribunal in L H Sugar case - - held that all the retrospective legislations did not provide for any proper collection mechanism and so in spite of legislation, the tax could not be collected. Predictably the Government took the case to the Supreme Court and recently the Supreme Court upheld the Tribunal order in the L H Sugar case. Please see ().
TIOL had extensively covered the issue. Please see
1. Our article Service tax on goods transport stranded on the highway?
2. Our story SC upholds another retrospective legislation; Service tax on GTA is valid
3. GUJARAT AMBUJA CEMENT LTD Vs UNION OF INDIA ()
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After all these rounds of litigation and retrospective legislation, the fact remains that the government failed miserably in collecting the tax for those few months in 1997-98.