TaxTMI 
TaxTMI 
2008 (11) TMI 418
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.... their case that the demand for service tax is illegal. 2. I heard learned counsel for the petitioner Sri. T.K. Ananda Padmanabhan in WPC No. 26625/08, Sri R.T. Pradeep in WPC No. 27899/08, learned counsel for the Central Government Sri Gopinath Menon in both cases and learned counsel for the Municipality Sri J. Omprakash in WPC. No. 26625/08 and Sri V.M. Kurian in WPC No. 27899/08. According to the petitioners, they have entered into agreements with the Municipality and they are in possession of the tenanted premises. Under the agreement, there is no provision for payment of service tax. Therefore, the demand for payment of service tax is illegal. Secondly, they would contend that Service tax is a tax which is payable by the Munici....
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....ndirect tax levied on certain services provided by certain categories of persons including companies, association, firms, body of individuals etc. 7. In the light of what is stated above, it is clear that Service Tax is a VAT which in turn is destination based consumption tax in the sense that it is on commercial activities and is not a charge on the business but on the consumer and it would, logically, be leviable only on services provided within the country. Service tax is a value added tax. 37. In the case of Tamil Nadu Kalyana Mandapam Assn. v. Union of India and Ors. reported in (2004) 5 SCC 632 = 2004 (167) E.L.T. 3 (S.C.) the Division Bench of this Court held that service tax is an indirect tax and is to be paid on al....
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....d the duty of excise on any goods under this Act shall, unless the contrary is provided by him, be deemed to have passed on the full incidence of such duty to the buyer of such goods". The direct legal consequence of application of S. 12B of the Central Excise Act, 1944 to service tax is that there is a presumption that the service has been passed on to the customer who is the beneficiary of the service, and that is the reason why the service tax is levied on the service provider himself. It is open to the service provider to pass on the tax to the beneficiary of the service and reimburse himself. In other words, by reason of the statutory presumption, the service provider does not pay the tax and the tax falls on the service receiver." ....
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....s open to the legislature even if it is an indirect tax to provide that it shall not be passed on to the consumer. Example of such law is Section 5A of the KCST Act which provides for levy of purchase tax. It prohibits the passing on of the tax to the consumer. The same is the position in respect of the turnover tax under Section 5(2)(c) of the KCST Act. Therefore, examples are not wanting when the legislature intended that be it an indirect tax, it should be borne by the assessee and it cannot be passed on. There is no such prohibition in the matter of service tax. That apart, the bench decision of this court as already noted, specifically declares that service tax can be passed on by the service provider. Therefore, there is no merit in t....
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....h trade or business, or any income accruing or arising in connection therewith. (3) Nothing in clause (2) shall apply to any trade or business, or to any class of trade or business, which Parliament may by law declare to be incidental to the ordinary functions of Government." Undoubtedly, Article 289 constitutes a fetter on the power of the Union to levy tax on the properly of the State or on its income. The State is an expression which is not defined in Article 366 as such. In Article 12, no doubt, State is defined as including authorities. But it is at once relevant to note that the said definition is limited to the provision of Part III of the Constitution dealing with fundamental rights. Article 154 of the Constitution which ....