PAN card issuance services and Business Auxiliary Service taxability under sovereign function and client-service provisions examined.

Services rendered to the Income Tax Department for issuance of PAN cards are examined for taxability as Business Auxiliary Service and for whether they are instead connected with a sovereign function. The analysis also considers whether such services fall within Section 65(19)(vi) and (vii) of the Finance Act, 1994 as services provided on behalf of the client or as incidental or auxiliary services. The Bombay High Court admitted the appeal on the substantial questions of law framed, leaving those issues for determination.

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Issues: Whether the services rendered to the Income Tax Department for issuance of PAN cards were taxable as Business Auxiliary Service or were services rendered in relation to a sovereign function; and whether such services fell within Section 65(19)(vi) and (vii) of the Finance Act, 1994 as provision of services on behalf of the client and incidental or auxiliary services.

Outcome: The appeal was admitted on the substantial questions of law framed.

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