IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Commercial Tax Revision No.02 of 2014
Valley Hotel & Resorts,
(Through its partner Shri Arun Goyal),
Khasra No.1011/2,
Central Hope Town,
Selaqui, Chakrata Road,
Dehradun….. …..Revisionist/Applicant.
Versus
The Commissioner,
Commercial Tax, Dehradun. .….Respondent
Mr. P.R. Mullick, Advocate for the revisionist.
Ms. Puja Banga, Brief Holder for the State of Uttarakhand/respondent.
Dated: April 10, 2014
Coram: Hon'ble Barin Ghosh, C.J.
Hon'ble V.K. Bist, J.
(Per: V.K. Bist, J.)
The revisionist is a partnership firm, engaged in
the business of hotel. It provides boarding and lodging
facilities to its customers. It also provides restaurant
services. Upto 01.07.2012, the activities of the
revisionist were covered under the Uttarakhand Vat
Act, 2005 in respect to supply of cooked food in the
restaurant. On 06.06.2012, the Government of India,
Ministry of Finance (Department of Revenue) issued a
notification amending the Service Tax (Determination
of Value) Rules, 2006 by introducing Service Tax
(Determination of Value) Rules, 2012, by which 40% of
billed value to the customer, for supply of food or any
other article of human consumption or any drink in
restaurant, was made liable to Service Tax. Thereafter, the revisionist moved an application under Section 57
of the VAT Act, 2005, requesting not to charge VAT on
40% billed amount to the customer, as same has
already suffered Service Tax. The said application was
rejected by the Commissioner, Commercial Tax,
against which appeal was filed before Commercial Tax
Tribunal. Same was also dismissed. Aggrieved thereby,
the present revision has been filed.
2. We have considered the submission of learned
counsel for the parties. Value Added Tax can be
imposed on sale of goods and not on service. Service
can be taxed by Service Tax Laws. The authority
competent to impose service tax has also assumed
competence to declare what is service. The State has
not challenged the same. Therefore, where element of
service has been so declared and brought under the
Service Tax vide Government of India notification dated
06.06.2012, (i.e. 40% of bill amount to the customers
having food or beverage in the restaurant was made
liable to service tax) no Value Added Tax can be
imposed thereon.
3. In our view, the Commissioner, Commercial Tax
erred in rejecting the application of the revisionist.
Thus, the revision is allowed. Judgments of Tribunal as
well as of the Commissioner, Commercial Tax are set
aside. The Commissioner, Commercial Tax is directed
to pass order afresh in the light of above observations.
(V.K. Bist, J.) (Barin Ghosh, C.J.)
Regards
Prarthana Jalan
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