Gujarat High Court
Green Environment Services ... vs Union Of India & on 5 March, 2008
Author: M.S.Shah
Bench: M.S.Shah, Ravi R.Tripathi
SCA/30148/2007 1/7 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION No. 30148 of 2007
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GREEN ENVIRONMENT SERVICES COOPERATIVE SOCIETY LTD
& 1 - Petitioner(s)
Versus
UNION OF INDIA & 1 - Respondent(s)
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Appearance :
MR SN SHELAT, SR. ADVOCATE with MR MITUL K SHELAT for Petitioner(s) : 1
- 2.
MR HARIN P RAVAL for Respondent(s) : 1,
NOTICE SERVED BY DS for Respondent(s) : 2,
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CORAM : HONOURABLE MR.JUSTICE M.S.SHAH
and
HONOURABLE MR.JUSTICE RAVI R.TRIPATHI
Date : 05/03/2008
ORAL ORDER
(Per : HONOURABLE MR.JUSTICE M.S.SHAH) At the outset, Mr Shelat submitted that the petitioner Society is a body of persons organized as a Cooperative Society based on the principle of mutuality for providing treatment of effluents and management of waste generated by industrial units which are members of the petitioner Society. The petitioner Society cannot, therefore, be said to be rendering any service as such to any outsider in particular, but the activities of the society also have the object in the nature of public service by taking effective steps for prevention and control of pollution and therefore, the petitioner Society would fall in clause (iii) - "any person or body of persons engaged in any activity having objects which are in the nature of SCA/30148/2007 2/7 ORDER public service and are of a charitable, religious or political nature"
which is excluded from the purview of service tax under the provisions of Section 65(25a) of the Finance Act, 1994.
2. After hearing Mr SN Shelat learned Senior Advocate with Mr Mitul Shelat for the petitioner Society and Mr Harin P. Raval, learned Assistant Solicitor General for the Union of India for sometime, we put a query to the learned Assistant Solicitor General as to whether there is any power to grant an exemption from service tax. The learned Assistant Solicitor General fairly invited our attention to the provisions of Section 93 of the Finance Act, 1994 which reads as under :-
"93.Power to grant exemption from service tax (1) If the Central Government is satisfied that it is necessary in public interest so to do, it may, by notification in the Official Gazette, exempt generally or subject to such conditions as may be specified in the notification, taxable service of any specified description from the whole or any part of the service tax leviable thereon.
(2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, exempt any taxable service of any specified description from the payment of whole or any part of the service tax leviable thereon, under circumstances of exceptional nature to be stated in such order."
3. Mr Shelat for the petitioner Society has given a detailed background history leading to establishment of the Common Effluent Treatment Plant and the solid waste management system SCA/30148/2007 3/7 ORDER set up by the petitioner Society for protection of environment and prevention and control of pollution, pursuant to the directions given by this Court in Pravinbhai Jashbhai Patel Vs. State of Gujarat, 1995(2) GLR Page-1210 and in Gujarat Chamber of Commerce and Industry Vs. Pravinbhai Jashbhai Patel, 1997(1) GLH Page-136. Mr Shelat has also invited our attention to the directions contained in the later judgment, whereby this Court directed that all the industrial units having pollution potential and located in GIDC estates at Vatva, Naroda and Odhav shall become members of the Common Effluent Treatment Plant in the concerned estate and such membership is mandatory irrespective of the fact whether a particular industrial unit has its own Secondary Effluent Treatment Plant or not. The Common Effluent Treatment Plant for all the industries in a particular area not only helps those industries to give the necessary secondary treatment to effluents being discharged by them, but it also enables the association of industries running such Common Effluent Treatment Plant to effectively monitor the functioning of such industries and it also makes the statutory task of law enforcement agencies like Gujarat Pollution Control Board more effective, as it would otherwise be impossible for such regulatory agency to monitor hundreds and thousands of individual industrial units spread over the entire State.
4. Mr Shelat has also invited our attention to the fact that there are in all 17 Common Effluent Treatment Plants in Gujarat SCA/30148/2007 4/7 ORDER established pursuant to the directions of this Court and that each Common Effluent Treatment Plant is managed and administered by the respective body of industries either as a Cooperative Society or as a Company established under Section 25 of the Companies Act, 1956.
5. Mr Shelat further points out that the petitioner Society was constituted pursuant to the aforesaid directions of this Court and that the petitioner Society was so constituted with the joint initiative of the State Government, Central Government and the industries in the year 1996 for the purpose of establishment and management of common facilities for treatment of effluents of the industrial units in the area. The Common Effluent Treatment Plant was established in the year 1998. For the said purposes, the State Government and the Central Government each granted 25% of the project cost as subsidy. A plot admeasuring 18500 sq. mtrs. was allotted by the Gujarat Industrial Development Corporation. The Central Government and the State Government accordingly gave subsidy of Rs.10.75 crores and the petitioner Society received from its members contribution of Rs.22.23 crores.
6. Mr Shelat also points out that the Common Effluent Treatment Plant is a biological treatment plant in which the effluent generated from the factories of the member factory is provided treatment and the treated effluent is thereafter discharged to the SCA/30148/2007 5/7 ORDER river Sabarmati by means of a pipeline. The petitioner Society treats 30 crore litres effluents of the industrial units in Vatva every month and also handles 8000 metric ton of solid waste per month. The petitioner Society has recently entered into an agreement for application of advanced German technology for the Common Effluent Treatment Plant of the petitioner Society.
7. Mr Shelat has also invited our attention to the objectives for which the petitioner Society is established which are all aimed at prevention and control of industrial pollution and also for related aspects like spreading awareness, setting up libraries and designing and executing various programs to fulfill the objectives. Mr Shelat, therefore, submits that the sole purpose and object of the petitioner Society is to work towards maintaining a pollution free environment and achieving the global mission of sustainable development.
8. Mr Shelat further points out that the object of the petitioner Society is not to generate profits from the affairs of the petitioner Company but only to effectively eliminate pollution of air, water and soil by treatment of industrial effluents and solid waste and to ensure a cleaner environment. The learned counsel also relies on the annual reports of the petitioner Society for contending that the surpluses generated from its activities are not distributed by the petitioner Society, but they are ploughed back for the purpose of SCA/30148/2007 6/7 ORDER providing effluent treatment and solid waste management in a more effective and efficacious manner.
9. Having heard the learned counsel for the parties and having regard to the aforesaid aspects, it does appear to the Court that the petitioner Society has been established with the aid and assistance of the Central Government and the State Government and the petitioner Society is engaged in the activity of ensuring a safe and cleaner environment by undertaking treatment of industrial effluents and industrial waste materials. This activity for ensuring protection of the environment is certainly an activity in public interest. Adherence to the principle of sustainable development has now attained the status of a constitutional mandate. It is, therefore, constitutional duty of the State to devise and implement a coherent and coordinated program to meet its obligation of sustainable development based on inter-generational equity as has been held by the Hon'ble Supreme Court in A.K.Sarma Vs. Union of India, 1999(2) SCC 178.
10. We are, therefore, sure that if the petitioner Society makes a suitable representation to the Central Government for granting exemption to the petitioner Society and to the other Societies/bodies running Common Effluent Treatment Plants and solid waste management system for industries in the State of Gujarat, the Central Government will duly consider such SCA/30148/2007 7/7 ORDER representation in light of the observations made in this order. The representation shall be made within two weeks from today and the decision of the Central Government on such representation shall be placed on the record of this petition within two months thereafter.
S.O. to 23.06.2008. In the meantime, there shall be interim stay against recovery of any service tax from the petitioner Society.
[M.S. SHAH, J.] [RAVI R. TRIPATHI, J.] mrpandya*