TaxTMI 
TaxTMI 
2024 (5) TMI 415
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....r, VAT was paid on the total value of the invoice including charges of handling and forwarding. The case of the department is that handling and forwarding charges collected by the appellant from their customers is liable to service tax. The period involved in this case is from 2012-2013 to 2013-2014. The show cause notices were issued on 16.05.2013 & 12.03.2015. 2. Learned Advocate seeks to place reliance on the order in party's own case bearing Final Order No. 11565/2023 which was decided on 24.07.2023 and pleads that in the present case, it is only sequel period demand. Learned Advocate seeks to place reliance on the fact that they discharged VAT on the handling charges and therefore VAT having been paid, they cannot be subjected to Serv....
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....ng charges had been recovered from the customer. Same having element of services only service tax was very much chargeable. 4. Considered. This Bench agrees with the reasoning of the AR that the earlier decision was sub-silentio on aspect doctrine of aspect and its applicability. The payment of VAT, when service portion is also involved and contract/invoice is not indivisible cannot deprive, department of its due revenue, specially in the negative list regime. This has been brought out clearly by Hon'ble High Court of Karnataka in 2015 (40) STR 51 (Kr.) in BALLAL AUTO AGENCY vs. UOI while summing up decision of Apex Court on this point in para 25 to 27 of the decision as below: "25. In fact, in BSNL, Hon'ble Supreme Court has referred to....
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....e mutually exclusive. A transaction or activity may consist of different elements providing for or attracting different nature of levy. (c) In Escotel Mobile Communications Ltd. v. Union of Indian and Others reported in (2002) Vol.126 STC 475 (Kerala) = 2006 (2) S.T.R. 567 (Ker.), it has been held that : "while the State Legislature is competent to impose tax on "sale" by a legislation relatable to entry 54 of List II of Seventh Schedule, the tax on the aspect of "services" rendered not being relatable to any entry in the State List, would be within the legislative competence of Parliament under Article 248 read with entry 97 of List I of the Seventh Schedule to the Constitution." (d) In this context, Hon'ble Supreme Court in Feder....
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....execution of works contract or in a composite contract. Thus, different aspects of the same transaction can involve more than one taxable event. There is nothing to prevent taxation of different aspects of the same transaction as separate taxable events. "It is a wellestablished judicial principle that so long as the legislation is in substance on the matter assigned to the Legislature enacting the statute, it must be held valid in its entirety even though it may incidentally trench upon matters beyond its competence." vide T.N. Kalyana Mandapam Association v. Union of India [(2004) 135 STC 480] = 2006 (3) S.T.R. 260 (S.C.) = 2004 (167) E.L.T. 3 (S.C.). 26. In the aforesaid decision on the point under consideration, the Hon'ble Suprem....
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....the judgment of the High Court in which the service aspect was distinguished from the supply aspect. In our view, reliance placed by the High Court on Federation of Hotel & Restaurant Association of India and, in particular, on the aspect theory is, therefore, apposite and should be upheld by this Court." 27. The Bombay High Court in Indian Hotels and Restaurant Association (supra) while distinguishing between tax on sale or purchase of goods and tax on service, has borne in mind Article 366(29A)(f) of the Constitution and has observed as under :- "45. It is therefore, dear that a sales tax is on sale of goods. While selling, supply thereof is contemplated and covered by Article 366(29A)(f) of the Constitution of India. It does not me....