Liability upheld for service tax on outdoor caterer supplying inflight services

The court upheld the liability of the petitioner for service tax as an outdoor caterer supplying food and beverages to air companies for inflight services. The court rejected the petitioner's arguments against the levy of service tax, clarified legal definitions, and highlighted the absence of grounds for challenging the constitutional validity of the tax. The court also addressed potential double taxation and exemption provisions, ultimately dismissing the petitioner's claims due to lack of merit.

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Issues:
Challenge to the liability of service tax on outdoor caterers supplying food and beverages to air companies for inflight services.

Analysis:
The judgment deals with a case where a petitioner engaged in supplying food and beverages to air companies for inflight services challenged the demand for service tax by the Central Excise Department. The petitioner contested that they are not liable to pay service tax as their supplies are not for any specific purpose or occasion. The court noted that the statutory provisions define "caterer" and "outdoor caterer," and the petitioner's activities fell within the definition of an outdoor caterer. The court clarified that the purpose or occasion referred to in the definition clause pertains to the customer, not the frequency of supply. The court rejected the argument that supplying services in an aircraft does not constitute outdoor catering, stating that service anywhere outside the caterer's place attracts liability under the law.

The court also addressed the petitioner's argument regarding the constitutional validity of the levy of service tax, citing a Supreme Court decision upholding the constitutional validity of service tax on outdoor caterers. Additionally, the court highlighted that the transaction involving supply of food and beverages could be subject to both service tax and sales tax, as clarified by previous Supreme Court decisions. The court emphasized that the petitioner's liability for service tax was not exempted by the payment of sales tax on the same transaction.

Furthermore, the court considered a notification granting exemption on service tax for outdoor caterers and noted that the petitioner's grievance regarding double taxation was unfounded. The court mentioned that other outdoor caterers supplying food to aircrafts were registered and paying tax without dispute. The petitioner had also started remitting tax after registration in another state, indicating a lack of merit in their challenge. Consequently, the court dismissed the writ petitions, emphasizing that there was no basis for interference and no costs were awarded.

In conclusion, the judgment upheld the liability of the petitioner for service tax as an outdoor caterer supplying food and beverages to air companies for inflight services. The court rejected the petitioner's arguments against the levy of service tax, clarified the legal definitions, and highlighted the absence of grounds for challenging the constitutional validity of the tax. The court also addressed the issue of potential double taxation and exemption provisions, ultimately dismissing the petitioner's claims due to lack of merit.

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