Statutory police services and treasury remittance supported prima facie exclusion from Security Agency tax and interim relief.

Services rendered by the State police under the Rajasthan Police Act, 2007 were treated as prima facie arising from statutory functions and, on that basis, outside taxable Security Agency Services at the interim stage. The tribunal noted that the fees were remitted to the Government treasury, supporting the view that the receipts were income derived from statutory duties rather than private security activity. It also recorded that the broader question whether Union taxation could reach State income under Article 289 of the Constitution required final hearing. Full waiver of pre-deposit and stay of further proceedings were therefore granted.

---

---

Issues: Whether the services provided by the State police under the Rajasthan Police Act, 2007 were prima facie outside the scope of taxable Security Agency Services and whether, in view of the statutory and constitutional issues raised, full waiver of pre-deposit and stay of further proceedings should be granted.

Analysis: The services were described as being rendered by the State through its police authority under the enabling provision of Section 46 of the Rajasthan Police Act, 2007, with the fee being remitted to the Government treasury as income derived from performance of statutory functions. On that basis, the services were treated as prima facie excluded from taxable Security Agency Services under the cited departmental circulars. The order also noted that the question whether Union taxation could reach income of the State under Article 289 of the Constitution of India required consideration at the final hearing.

Conclusion: Full waiver of pre-deposit and stay of further proceedings were granted in favour of the appellant.

Final Conclusion: The order granted interim relief on a prima facie view that the impugned services arose from statutory functions of the State and therefore did not immediately warrant pre-deposit or coercive recovery.

Ratio Decidendi: Services rendered by a State authority in discharge of statutory functions, with receipts remitted to the public treasury, may prima facie fall outside the taxable net for Security Agency Services for purposes of interim relief.

---