A contract agreement was signed on 20.11.2003. The dispute arouse when the contractor raised a claim for service tax. Whereas the contract agreement stated that the prices included are inclusive of excise duty, Sales tax, Entry tax, octori or any other tax.
The contractor claims the ground that service tax came on 10.09.2004 and any tax enforced by Govt of india and new change/new statutory taxes are payable by purchaser as per contract law.
whereas the Purchaser/first party claim that service tax was imposed on 01.07.2003 and as contract price included all taxes, service tax is not reimbursed.