1. This petition seeks declaration that explanation to Section 65(zzzh) of the Finance Act, 1994 (#24;the Act#25;) and CBEC Circular No. 334/3/2010-TRU, dated 1-7-2010 are unconstitutional.

2. Case of the petitioner is that it is engaged in development and sale of residential flats and enters into agreement for construction of flats with the contractors. The said flats are ultimately sold to the customers. Service tax is leviable as per the provisions of the Act on taxable services as defined under Section 65. Section 65(zzzh) includes service in relation to construction of a complex. Definition of construction of a complex under Section 65(30a) refers to construction of a new residential complex and other activities mentioned therein. Residential complex is defined under Section 65(91a) as comprising of buildings, common areas and other facilities. As per the impugned circular, service tax is leviable on the builders even when they enter into an agreement for sale and receive payment without issuance of completion certificate. As per explanation added to Section 65(zzzh), vide Finance Act, 2010 , construction of complex by a builder or any person authorized by the builder,