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2023 (1) TMI 1049 - HC - Service TaxConstitutional Validity - Chargeability of service tax on sale and supply of electricity - Section 66D(k) of the Finance Act, 1994 and the impugned Notification No. 32/201 0-Service Tax, dated 22-6-2010 - petitioner’s challenge to Section 66Dk of the Act is premised on the basis that placing the service relating to transmission or distribution of electricity by electricity transmission or distribution utility would mean that consumption of electricity is chargeable to service tax - HELD THAT:- It is relevant to note that by virtue of the said notification, the Government of India has “exempted taxable services provided to any person by a distribution licensee, a distribution franchisee or any other person by whatever mean called as authorized to distribute the power under the Electricity Act, 2003, from the scope of Section 66 of the Act”. This notification also cannot be construed to mean that consumption of electricity as otherwise is chargeable to tax but for the said notification - impugned notification has no bearing on this contention. Seeking a declaration that sale and supply of electricity is not chargeable to service tax under any of the sub clauses of Section 65 of the Act - HELD THAT:- The petitioner manages a mall. The petitioner receives supply of 4000 KV from the electricity distribution company for Non-Domestic High Tension on 11 KVA for its own use at the given premises (Plot no.67, DLF Industrial Area, Najafgarh Road, Delhi-110015 - hereafter the Mall). The petitioner has entered into agreements with various shop owners / licensees in the said mall and makes available the electricity on sub meter basis. The petitioner claims that the charges received from various shop keepers are essentially towards service charges as well as for the purchase of the electricity - It is his contention that not limiting the levy of service tax to the component of services provided by the petitioner and extending it to the costs of electricity is impermissible. According to petitioner, no service tax can be levied on the component which constitutes the cost of the electricity. Therefore, the petitioner seeks a declaration that service tax is not payable on the cost of supply / generation of electricity. Mr. Harpreet Singh seeks time to take instructions in this regard and to advance arguments. List for hearing on 27.02.2023.
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