Statutory police deployment charges are not taxable as security agency service when collected for sovereign public duties.

Charges recovered by a sovereign public authority for deploying additional police personnel under law were treated as part of the police force's statutory duty to maintain public peace and order, not as consideration for a business security service. The analysis noted that the police department was not engaged in rendering security agency services, the charges were collected under the governing legal framework and credited to the Government treasury, and the definition of "person" in the relevant tax provision did not extend to the State in this context. Accordingly, the deployment charges were not liable to service tax.

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Issues: Whether the State police, while deploying additional police personnel on payment for security and law-and-order duties, fell within the definition of security agency service and was liable to service tax.

Analysis: The activity was held to be an incident of the police force's statutory and sovereign duty to maintain public peace and order. The authority relied on the statutory framework governing police functions, the provision enabling levy of user charges for additional police deployment, and the departmental circular clarifying that charges recovered for statutory functions of sovereign/public authorities are not taxable if the amounts are collected under law and credited to the Government treasury. It was also found that the police department was not engaged in a business activity of rendering security services, and that the definition of "person" in the relevant tax provision did not extend to the State in this context.

Conclusion: The police department was not covered by security agency service and no service tax was leviable on the charges recovered for such statutory deployment of police personnel.

Ratio Decidendi: Charges recovered by a sovereign public authority for performing a statutory function under law and remitted to the Government treasury do not constitute taxable consideration for a business service.

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