In Brief
The Supreme Court held that Northern Operating Systems, which received seconded employees from overseas group companies under secondment agreements, was liable to pay service tax on amounts reimbursed to those companies for employee salaries and allowances. Although the assessee had operational control over the seconded workers, they remained employed by and entitled to benefits from the overseas companies. Applying a multi-factor test rather than relying solely on control, the Court found that the overseas companies were providing manpower supply services. However, the revenue's invocation of extended period of limitation was unjustified as it lacked evidence of wilful misstatement. The Court partly allowed the revenue's appeal, confirming tax liability for normal assessment periods only, excluding extended periods.
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