TaxTMI 
TaxTMI 
2019 (4) TMI 245
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....d into a contract for "supply and washing of bedrolls to the passengers travelling in the trains" to additionally bear the liability of the "service tax" imposed on the assessee-petitioner by amendment of law with effect from July 1, 2012 to the extent of Rs. 31,37,692. 2. The learned counsel for the petitioner contractor Mr. V. Raghuraman has urged before the court that since the law relating to imposition of service tax underwent a drastic change with effect from July 1, 2012, wherein except the services covered in the "negative list", all other services became taxable and exigible to the service tax with effect from July 1, 2012 and the services of "wet washing" of bed rolls provided to the passengers in the trains, became taxable in ....
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....for the parties. According to us, the question posed in the matter would really turn on : as to whether, the appellant had intended to bear under the contract, service tax, which admittedly, was notified after a contract had materialized between the parties. In order to come to a firm conclusion either way, one would have to first look to clause 13.3 of the GCC. For the sake of convenience the said clause is extracted hereinafter : 'All duties, taxes, royalties and other levies payable by the bidder under the contract, and under applicable laws or for any other cause, shall be included in the rates, prices and total bid price submitted by the bidder.' (emphasis supplied) 3.4 A reading of the aforesaid clause clearl....
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....l charges to the petitioner-contractor even on account of amendment of law relating to service tax. He drew the attention of this court towards clause 51 of the agreement vide Annexure-A, which provides for a clause for arbitration for any dispute, difference or question between the petitioner-contractor and the respondent-railway administration to be referred to the Chief Commercial Manager of South Western Railway, whose decision shall be final. 6. The existence of arbitration clause in the general conditions of the contract is not even disputed by the petitioner-contractor's side but admittedly no effort has been made in the present case to take the matter to the arbitration at all. 7. On the last occasion on September 17, 2018....
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....le, will be deducted from the monthly bills. 3. While, the learned counsel for the petitioner-contractor con tends that since the levy of service tax become applicable only after 2012, whereas the contract was in force from the point of time prior to that, the new levy of service tax on the petitioner-assessee, the contractor was made liable to pay the service tax, which it did pay to the Central Government and now claims reimbursement from the awarder of the contract, i.e., railways. 4. On the other hand, learned counsel for the respondent-South Western Railways, Mr. N. S. Sanjay Gowda argues that the 'rates' quoted for such contract of washing of linen was inclusive of applicable taxes and therefore, such service....
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....educted from the monthly bills. 9. After hearing the learned counsels today also, this court is of the considered opinion that the issue raised in these present writ petitions is a matter of contract between the two parties and the same cannot be pronounced by this court at this stage prematurely. Neither the said issue for bearing additional tax liability has been adjudicated by any competent authority of the respondent-railway or the Service Tax Department nor the parties have raised this dispute before the agreed alternative forum of arbitration. There has been no novation of contract between the parties after July 1, 2012 with regard to variation of rates for the services rendered by the petitioner-contractor nor apparently the respo....