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Thermal Contractors Association Thru' Secy. v. Director Rajya Vidyut Utpadan Nigam Ltd & Others - WRIT TAX No. 553 of 2005 [2005] RD-AH 1332 (13 May 2005)


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Thermal Contractor Association through

Secretary Mahendra Nath Pandey. ....Petitioner


Director Rajya Vidyut Utpadan Nigam

Ltd. And others. . ....Respondents


Hon'ble R.K. Agrawal, J.

Hon'ble Rajes Kumar, J.

By means of the present writ petition filed under Article 226 of the Constitution of India the Contractors Association through its Secretary Mahendra Nath Pandey seek the following relief:

"(i) Issue a writ order or direction in the nature of mandamus directing the respondent no.1 & 2 to provide service tax to the members of the petitioner from the date of its applicability on the amount accrued thereon.

(ii) Issue a writ order or direction in the nature of mandamus directing the respondent no.2 to decide and dispose of application submitted by the members of the petitioner's with regard thereto forthwith.

(iii) Issue a writ order or direction in the nature of mandamus directing the respondent no.2 to remit the service tax to its head within stipulated period enabling the members of the petitioner not being made subject of penalty or interest by the respondent no.3.

(iv) Issue any other suitable writ, order or direction that this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.

(v) Award cost of the petition in favour of the petitioner."

Briefly stated, the facts giving rise to the present reference are as follows:

The petitioner is an association of thermal contractor providing various services in Rajya Vidyut Utpadan Nigam Limited and it is registered under the Societies Registration Act, 1860. The object of the association is to look after well being of its members as well as to look after their interest, which may not be in any manner adversely affected. Member of the petitioner association  undertake repairs and maintenance of various items/projects in Obra/Anpara Rajya Vidyut Utpadan Nigam Limited, Sonebhadra. They are being paid for the services rendered by them in terms of the contract entered into between the members of the petitioner association and the respondent no.2. According to the petitioner their members are also entitled for reimbursement of the amount of service tax, which they have to pay under the provisions of section 67 and 68 of the Finance Act, 1994 read with Rules 6 of the Service Tax Rules, 1994.

We have heard Sri Ravi Kant, Senior Advocate assisted by Sri Govind Krishna, learned counsel for the petitioner and Sri W.H.Khan, learned counsel for the respo

ndent nos. 1 and .2 and learned Standing Counsel, who represents the respondent no.3.

Sri Ravi Kant, learned Senior Counsel submitted that from the reading of various provisions of the Finance Act, 1994 relating to imposition of service tax and the Rules framed thereunder, the member of petitioner association are under the obligation to pay service tax to the Union of India and deposit the tax, non-compliance of which entails penal consequences. According to him, under the scheme of the levy of service tax, the members of the petitioner's association are entitled to realise the amount of service tax from its customers and therefore, the respondent no.2 is obliged to pay the service tax.

Having given our anxious consideration to the various pleas raised by Sri Ravi Kant, the learned Senior Counsel , we find that the Hon'ble Supreme Court in the case of T.N.Kalyana Mandapam Assn. Vs. Union of India and others, (2004) 5 SCC 632, has held that the service tax is an indirect tax and is to be paid on all the services notified by the Government of India for the said purpose, the said tax is on the service and not on the service provider. It has further held that under section 68 of the Finance Act, 1994, as amended by the Finance Act, 1997, read with Rule 2(1)(d)(ix) of the Service Tax Rules, 1994, service provider is expected to collect the tax from the client utilising his service. Therefore, even though under the scheme of the service tax, the payer of service tax is entitled to realise service tax from its customers yet it all depends upon contracts entered into between the parties. It is always open to the service provider to charge or not to charge the amount of service tax from its customers and to pay it from its own pocket.  In the absence of any contract having been filed alongwith the petition we are not in a position to dwelve into and adjudicate upon the issue raised by the learned Senior Counsel for the petitioner.

In view of the forgoing discussions, we do not find any merit in the writ petition. It is accordingly, dismissed in limine.




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