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2022 (1) TMI 443 - HC - VAT and Sales TaxLevy of Entertainment tax - Valuation - consideration towards the services excluding the service tax component or on both - entertainment tax can be levied on the transaction of service which is so characterized under the Finance Act, 1994 or not? - legislative competence of State of Karnataka to levy tax under KET Act, 1958 on the transaction which is exclusively reserve for Union Parliament for the purposes of service tax under Entry 92C of the List I of Schedule VII of the Constitution of India - prohibition under constitutional discipline of Article 246 to adopt the sources of revenue which are exclusive received for the Union Parliament - applicability of judgement of ANAND SWARUP MAHESH KUMAR VERSUS THE COMMISSIONER OF SALES TAX [1980 (9) TMI 238 - SUPREME COURT] - validity to proceed with the appeals while the question of legislative competence of State of Karnataka are pending consideration before this Hon'ble Court? HELD THAT:- The Tribunal referring to various provisions of the Finance Act, 1994, as well as the Service Tax Rules, 1994, has observed that it is not possible or permissible to segregate the service tax component for the purpose of levy of entertainment tax in the case of the appellant as the service tax component is not indicated separately in the bills or invoices issued to the customers. No proof is available on records to show that service tax has been separately collected. It was further observed that the charging Section 4-G of the Act uses the expression 'on the amounts received or receivable' is liable for entertainment tax at 6%, and therefore, the assessing authority is correct in levying entertainment tax on service tax component, and the appellate authority is correct in confirming the same. The Hon'ble Supreme Court in ALL INDIA FEDERATION OF TAX PRACTITIONERS & ORS VERSUS UNION OF INDIA & ORS [2007 (8) TMI 1 - SUPREME COURT], has held that service tax is levied on the service and not on the service provider. It has been held in the said case that service tax is a value added tax which in turn is both a general tax as well as destination based consumption tax, in the sense, it is levied on commercial activities and is not a charge on the business, but on the consumer and it would, logically, be levied only on the service provided. It would meet the ends of justice if the order passed by the Tribunal is set aside and the matter is remitted to the Tribunal to consider the appeals afresh after giving an opportunity to the petitioner to produce all the relevant documents in support of his case including the invoices raised by it as against the subscribers, and thereafter, the appeals shall be heard and disposed of - Petition allowed in part.
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