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M/s. Bhimas Hotels Pvt. Ltd. Versus The Union of India, rep. by its Secretary, Ministry of Finance

2017 (4) TMI 860 - ANDHRA PRADESH HIGH COURT

Scope of service - whether the food supplied by an employer to the workers at a subsidized rate, would come within the meaning of the expression service, irrespective of whether the food is supplied within the premises or outside the premises? - Held that: - any supply of subsidized food to the workers by the management of a Company, has to be seen as part of the pay package that the workers have negotiated with the employer. Under the Factories Act, 1948 and even under the Industrial Disputes A .....

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petitioner. - WRIT PETITION No. 217 of 2017 - Dated:- 23-3-2017 - SRI V. RAMASUBRAMANIAN AND MS. J. UMA DEVI, JJ. For The petitioner : Dr. M.V.K. Murthy For The Respondent : Mr. B. Narayana Reddy, the Assistant Solicitor General ORDER: (Per VRS,J) Aggrieved by an order in original passed by the 2nd respondent under the proviso to Section 73(1) of the Finance Act, 1994 (for short the Act), demanding service tax together with interest and penalty on the value of the food supplied to the workers o .....

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in original impugned in the writ petition, the 2nd respondent came to the conclusion that the food supplied by the management of the petitioner to its own workers at a subsidized rate, tantamounted to a service, taxable under Section 67 of the Act, in view of the fact that the food is supplied in an area outside the registered premises. Therefore, the short question that arises for our consideration is as to whether the food supplied by an employer to the workers at a subsidized rate, would com .....

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anner; or (ii) such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause (29A) of article 366 of the Constitution; or (iii) a transaction in money or actionable claim; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any court or tribunal established under any law for the time being in force. It may be seen from the above definition that to come within the purview of the d .....

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n goods or immovable property, by way of sale, gift or in any other manner from the purview of the definition. Similarly, any transfer, delivery or supply of any goods, which is deemed to be a sale within the meaning of Clause (29A) of Article 366 of the Constitution, is also excluded from the definition of the expression service. 7. Under a Notification bearing No.25/2012-Service Tax, dated 20.06.2012, which came into force with effect from 01.07.2012, certain activities were exempted from the .....

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of the definition service, the question of analyzing whether such activity falls within the exemption under the Notification, dated 20.06.2012, does not arise. Therefore, primarily, one has to satisfy oneself as to whether the activity in question satisfies all the ingredients of service within the definition of the term under Section 65B (44). 9. The specific case of the petitioner, on which there is no dispute on facts, is that they supply food to their workers at a subsidized rate. Naturally .....

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0. As a matter of fact, any supply of subsidized food to the workers by the management of a Company, has to be seen as part of the pay package that the workers have negotiated with the employer. Under the Factories Act, 1948 and even under the Industrial Disputes Act, 1947, the expression wages would include within its purview, anything that is supplied at a subsidized rate. Section 2(rr) of the Industrial Disputes Act, 1947 defines wages to mean, all remuneration capable of being expressed in t .....

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