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of <h1>Court dismisses writ petition challenging service tax on photography materials, directs pursuit of statutory remedies.</h1> The court dismissed the writ petition challenging the levying of service tax on materials used in photography services, directing the petitioner to pursue ... Service Tax – Photography service – Issue of extent of levy of service tax in composite contract settled by S.C. - Alternative remedies available to petitioners at the stage of show cause notice, high court should not interfere in excise of writ jurisdiction – Question raised to be considered and decided by competent authority Issues:Challenge to quash Section 65(47)(48) and Clause (72), sub-clause (zb) of Finance Act, 1994, and departmental clarifications/instructions regarding colour processing and developing laboratories for levying service tax.Analysis:The petitioner operates a high-tech laboratory for developing and processing exposed colour photographic films, arguing that service tax should not apply to the cost of materials used in photography services. The petitioner has paid service tax without claiming deductions for costs incurred on goods and materials. The Department of Revenue insists that the cost of materials is not excludable and proceeds to recover service tax based on the assumption that the petitioner did not sell the paper and chemicals.Legal Arguments:The petitioner contends that service tax should not be levied on the cost of materials used in photography services, citing an exemption circular. The respondents argue that the petitioner can avail exemption by proving the sale of goods. The petitioner relies on judgments to support their position, emphasizing that the value of the sale element in a composite transaction should not be subject to service tax.Judicial Analysis:The court considers previous judgments on the extent of service tax levied in composite contracts. It notes conflicting observations in different cases but ultimately upholds the respondents' objection that the court should not interfere at the show cause notice stage due to the availability of alternative statutory remedies. The court emphasizes the importance of exhausting alternative remedies before seeking judicial intervention.Conclusion:The court dismisses the writ petition, directing the petitioners to pursue alternative statutory remedies for their grievances. The questions raised in the petition are left open to be addressed by the competent authority in accordance with established laws. The petition is disposed of, emphasizing the importance of following proper legal procedures and exhausting available remedies before seeking court intervention.
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