Karnataka High Court
M/S. Bangalore Metro Rail Corporation ... vs The Ministry Of Finance on 16 October, 2012
Author: H.G.Ramesh
Bench: H.G.Ramesh
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W.P.No.34337/2011
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 16TH DAY OF OCTOBER 2012
BEFORE
THE HON'BLE MR.JUSTICE H.G.RAMESH
WRIT PETITION No.34337/2011 (T-RES)
BETWEEN:
M/S. BANGALORE METRO RAIL CORPORATION LIMITED
(A JOINT VENURE OF GOVT. OF INDIA AND
GOVT. OF KARNATAKA)
3RD FLOOR, BMTC COMPLEX
K H ROAD, SHANTINAGAR
BANGALORE - 560 027, KARNATAKA
REPRESENTED BY
MR N SIVASAILAM
MANAGING DIRECTOR. ... PETITIONER
(BY SRI K.S. RAVI SHANKAR, ADVOCATE)
AND :
1 THE MINISTRY OF FINANCE
GOVERNMENT OF INDIA
REP BY ITS SECRETARY MF (DR)
SHRI SUNIL MITRA
NEW DELHI - 110 011
2 THE CENTRAL BOARD OF EXCISE AND CUSTOMS
NORTH BLOCK, RASHTRAPATI BHAWAN
DEFENCE HEAD QUARTERS
REPRESENTED BY
MR S D MAJUMDER
CHAIRMAN, NEW DELHI - 110 011
3 THE COMMISSIONER OF SERVICE TAX
NO.16/1, S P COMPLEX
LALBAGH ROAD
REP BY MR R K SINGLA
BANGALORE - 560 027
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W.P.No.34337/2011
4 M/S RITES LTD
(A PUBLIC SECTOR UNDERTAKING
UNDER THE MINISTRY OF RAILWAYS, GOI)
NEW DELHI HOUSE, 27, BARAKHAMBA ROAD
NEW DELHI - 110 001
REPRESENTED BY
A N RAJAGOPALAN
CHIEF FINANCIAL ADVISER
5 THE MINISTRY OF RAILWAYS
459-A, RAIL BHAWAN, RAFI MARG
DELHI 110001
REPRESENTED BY
MR VIVEK SAHAI
THE CHAIRMAN OF RAILWAY BOARD
6 ALSTOM PROJECTS INDIA LTD
DODDANAKUNDI
27TH KM BELLARY ROAD
DODDANAKUNDI, BANGALORE
REPRESENTED BY
SHRI DINESH BOHRA
PROJECT MANAGER
7 ITD-ITD CEM JOINT VENTURE
SURVEY NO.10, BANNEGNAHALLI
OLD MADRAS ROAD, OPP CDAC (NGEF)
BANGALORE 560038
REPRESENTED BY
SHRI ANIWATTANANNAN SUTHOD
PROJECT MANAGER
8 THALES PORTUGAL SA
NO.65/2, BAGMANE TECH PARK
C V RAMAN NAGAR
BYRASANDRA, BANGALORE 560093
REPRESENTED BY
SHRI ANTONIO PINHAO
PROJECT MANAGER
9 TATA ELXSI LTD
ITPB ROAD, WHITE ROAD
BANGALORE 560048
REPRESENTED BY SHRI MADHUKAR DEV
MANAGER DIRECTOR
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W.P.No.34337/2011
10 SDS-KALINDEE RAIL NIRMAN (ENGINEERS) LTD
BEHIND BIAPPANAHALLI DEPOT
BAIYAPPANAHALLI, BANGALORE
REPRESENTED BY
SHRI HIMANSHU PANDA
PROJECT MANAGER
11 SCHINDLER INDIA PVT LTD
2ND FLOOR, DOOR NO.814 (OLD NO.419)
14TH CROSS, SHASTRINAGAR
K R ROAD, BANGALORE 560028
REPRESENTED BY
SHRI VINAY TUTEJA
BRANCH MANAGER
12 PARSONS BRINCKERHOFF
INTERNATIONAL INC (PBI)
3RD FLOOR, VAISHANAVI BADRI
48, 5TH MAIN, JAYAMAHAL EXTENSION
BANGALORE - 560 046
REPRESENTED BY
SHRI MILIND NIRMAL
PRINCIPAL - IN - CHARGE
13 ORIENTAL CONSULTANTS COMPANY LTD
901-902, NARAIN MAZIL
23, BARAKAHMABA ROAD
NEW DELHI 110 001
REPRESENTED BY
SHRI KAMAL SACHDEVA
REPRESENTATIVE OF OC
14 RITES LTD
3RD FLOOR, BMTC COMPLEX
K H ROAD, SHANTHINAGAR
BANGALORE 560027
REPRESENTED BY
SHRI VENKADA SWAMY
DEPUTY PROJECT DIRECTOR
15 SPAN CONSULTANTS PVT LTD
A V TOWERS, II FLOOR
MYSORE ROAD, BANGALORE 560018
REPRESENTED BY
SHRI S SENGUPTA, DEPUTY CEO
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W.P.No.34337/2011
16 MOTT MACDONALD PVT LTD
2ND FLOOR AL-LATHEEF
NO.2 UNION STREET
OFF INFANTRY ROAD
BANGALORE 560 001
REPRESENTED BY
MRS ANINDITA DAS
PROJECT MANAGER
17 S N BHOBE & ASSOCIATES PVT LTD
55, 1ST MAIN, RMV II STAGE
NEW BEL ROAD
BANGALORE 560094
REPRESENTED BY
SHRI UTPAL CHAKRAVARTY
VICE PRESIDENT
18 SREI-TUV-DBI CONSORTIUM
D-2, SOUTHERN PARK
5TH FLOOR, SAKET PLACE, NEW DELHI 110 017
REPRESENTED BY
DR RATIRANJAN MANDAL
CEO-SREI INFRASTRUCTURE FINANCE LTD
19 STUP CONSULTANTS PVT LTD
A-1 TOWER, 5TH & 6TH FLOOR
"GOLDEN ENCLAVE"
HAL AIRPORT ROAD
BANGALORE 560017
REPRESENTED BY
SHRI SAMUEL A T, DIRECTOR
20 WILLIS INDIA INSURANCE BROKERS PVT LTD
CROWN POINT
1ST FLOOR, NO.36
LAVELLE ROAD
KASTURBA ROAD CROSS
BANGALORE 560 001
REPRESENTED BY
SHRI SATHYAPRAKASH S
VICE PRESIDENT, KARNATAKA REGION
21 CIVIL AID TECHNOCLINIC PVT LTD
#1030, 13TH CROSS
BANASHANKARI 2ND STAGE
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W.P.No.34337/2011
BANGALORE 560070
REPRESENTED BY DR C S VISHWANATHA
CHAIRMAN
22 HYUNDAI ROTEM
231, YANGJAE-DONG
SEOCHO-GU SEOUL
137-938, KOREA
REPRESENTED BY DR S W CHO
PROJECT DIRECTOR
23 MITSUBISHI CORPORATION
MARUNOUCHI PARK BUILDING 6-1
MARUNOUCHI 2-CHOME, CHIYODA-KU
TOKYO 100-8086, JAPAN
REPRESENTED BY
MR AKIRA ONOE
PROJECT DIRECTOR
24 MITSUBHISHI ELECTRIC CORPORATION
2-7-3, MARUNOUCHI CHIYODA-KU
TOKYO 100-8310 JAPAN
REPRESENTED BY
MR TAKAYUKI OGAWA
PROJECT DIRECTOR
25 BINYAS CONTECH LTD
NO.200, CBI ROAD, GANGANAGAR
BANGALORE 560032
REPRESENTED BY MR NIRANJAN
PROJECT MANAGER
26 SAI RETRO FABS
NO.393, GROUND FLOOR Deleted vide Court
28TH MAIN order dated 25.8.2012
SECTOR-I, HSR LAYOUT
BANGALORE 560 102
REPRESENTED BY MR ANAND
MANAGING DIRECTOR
27 CEC-SOMA-CICI JV
601, PHOENIX TOWERS
NO.16, MUSEUM ROAD
BANGALORE 560025
REPRESENTED BY
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W.P.No.34337/2011
MR ANDREW LEISK
COMMERCIAL MANAGER
28 K P PADMANABHA & ASOCIATES
4C, BHARAT APARTMENTS Deleted vide Court
44/1, A & B order dated 10.9.2012
FAIRFIELD LAYOUT
BANGALORE 560 001
REPRESENTED BY
MR SUKEN PADMANABHA
PROPRIETOR. ... RESPONDENTS
(BY SRI ANIYAN JOSEPH, CGSC FOR R-1;
SMT.C.GEETHA, ADVOCATE FOR
SRI N.R.BHASKAR, SENIOR CGHC FOR R-2 & R-3;
SRI S.VENKATESH AITHAL, ADVOCATE FOR R-7;
SMT. LAKSHMI KUMARAN, ADVOCATE AND
SRI SRIDHARAN, ADVOCATE FOR R-6 & R-19;
SRI SUDEV HEGDE, ADVOCATE FOR R-21;
SMT. DHIVYA MENON, ADVOCATE FOR
DSK LEGAL ASSOCIATES, ADVOCATES FOR R-23 & R-24;
SRI V.K.NARAYANA SWAMY, ADVOCATE FOR R-5;
SRI P.M.VASUDEV & CO., ADVOCATES FOR R-9;
SRI C.R.RAGHAVENDRA, ADVOCATE FOR R-26;
SRI S.RAJENDRA, ADVOCATE FOR R-11;
SRI T.S.VENKATESH, ADVOCATE FOR R-4 & R-14;
R-26 & R-28 ARE DELETED;
R-8, R-10, R-12, R-13, R-15, R-16, R-17, R-18, R-20, R-22
R-25 AND R-27 ARE SERVED AND UNREPRESENTED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH
THE IMPUGNED DIRECTION/COMMUNICTION IN ANNEXURE-
H DATED 8.12.2010 AND PROHIBIT R3 AND HIS SUPERIORS
AND R-4 TO R-28 (WHO ARE PERFORMING SERVICES IN
RESPECT OF AND IN RELATION TO THE WORKS CONNECTED
WITH THE BANGALORE METRO RAIL PROJECT OF THE
PETITIONER) FROM LEVYING AND COLLECTING SERVICE TAX
ON AND FROM THE PETITIONER.
THIS WRIT PETITION COMING ON FOR PRELIMINARY
HEARING IN `B' GROUP THIS DAY, THE COURT MADE THE
FOLLOWING:
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W.P.No.34337/2011
ORDER
H.G.RAMESH, J. (Oral):
M/s Bangalore Metro Rail Corporation Ltd. is the petitioner in this writ petition. Learned Counsel appearing for the petitioner submits that the writ petition may be disposed of by clarifying the legal position that services rendered in relation to the execution of a works contract in respect of Railways is not taxable under Section 66 of the Finance Act, 1994 ('the Act' for short). I find no legal impediment to clarify the legal position. It is relevant to refer to the following provisions of the Act:
Section 65. Definitions In this Chapter, unless the context otherwise requires,-
(1)............................................................
..............................................................
(105) "taxable service" means any service provided or to be provided,― -8- W.P.No.34337/2011 ............................................................ .................................................................... (zzzza) to any person, by any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams.
Explanation: For the purposes of this sub- clause, "works contract" means a contract wherein,―
(i) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and
(ii) such contract is for the purposes of carrying out, ―
(a) erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire -9- W.P.No.34337/2011 proofing or water proofing, lift and escalator, fire escape staircases or elevators; or
(b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or
(c) construction of a new residential complex or a part thereof; or
(d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or
(e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects;
(zzzzb)........................................................
Section 66. Charge of service tax There shall be levied a tax (hereinafter referred to as the service tax) at the rate of twelve per cent of the value of taxable services referred to in sub-clauses (a), (d), (e), (f), (g), (h),
(i), (j), (k),(l), (m), (n) (o), (p), (q), (r), (s), (t), (u), (v), (w), (x), (y), (z), (za), (zb), (zc), (zh), (zi), (zj), (zk),
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W.P.No.34337/2011(zl), (zm), (zn), (zo), (zq), (zr), (zs), (zt), (zu), (zv), (zw), (zx), (zy), (zz), (zza), (zzb), (zzc), (zzd), (zze), (zzf), (zzg), (zzh), (zzi), (zzk), (zzl), (zzm), (zzn), (zzo), (zzp), (zzq), (zzr), (zzs), (zzt), (zzu), (zzv), (zzw), (zzx), (zzy), (zzz), (zzza), (zzzb), (zzzc), (zzzd), (zzze), (zzzf), (zzzg), (zzzh), (zzzi), (zzzj), (zzzk), (zzzl), (zzzm), (zzzn), (zzzo), (zzzp), (zzzq), (zzzr), (zzzs), (zzzt), (zzzu), (zzzv), (zzzw), (zzzx), (zzzy), (zzzz), (zzzza), (zzzzb), (zzzzc), (zzzzd), (zzzze), (zzzzf), (zzzzg), (zzzzh), (zzzzi), (zzzzj), (zzzzk), (zzzzl), (zzzzm), (zzzzn), (zzzzo), (zzzzp), (zzzzq), (zzzzr), (zzzzs), (zzzzt), (zzzzu), (zzzzv) and (zzzzw) of clause (105) of section 65 and collected in such manner as may be prescribed."
(Emphasis supplied) A reading of the above provisions would show that any service rendered in relation to the execution of a works contract in respect of Railways which is excluded under clause (zzzza) referred to above will fall outside the definition of taxable service and consequently no service tax shall be leviable under
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W.P.No.34337/2011Section 66 of the Act on the value of such services.
With this clarification, the writ petition stands disposed of.
Petition disposed of.
Sd/-
JUDGE *bk/ata.