TMI Blog2021 (4) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner relied on Section 32 of the CGST Act and sub-clause (2) to Section 32 stipulates that no registered person shall collect tax except in accordance with the provision of this Act or the Rules made thereunder - In the present cases, even before the introduction of the present CGST Act, the Contractors were paying the taxes based on the erstwhile Act, mainly Service Tax Act. After the implementation of the CGST Act, when there is prohibition of unauthorised collection of tax, the demand now made by the Southern Railways is in violation of the provisions of the CGST Act and therefore, the writ petitions are to be allowed. When there is a specific bar under the Act, more specifically, under Section 32, there is no reason whatsoever to make a demand for recovery of GST from the writ petitioners. Such a collection of tax is unauthorised and it is clarified that the collection of tax in such circumstances, more specifically, from the licensees are impermissible - In these cases, the respondent-Railways have treated the parking as rented out of property and therefore, the same would not fall under the provisions of the CGST Act and the writ petitioners are not liable to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 18514 of 2018 Honourable Mr. Justice S.M.Subramaniam For the Petitioner in WPs 21446,32112, 32455/17 531/18 : Mr.R.Krishna Prasad for M/s.Sarvabhauman Associates For the Petitioner in WPs 1666 to 1668, 4280,4371,15262 to 15265/18 : Ms.P.Poornima for M/s.G.Vijay Anand Associates For the Petitioner in WP4708/18 : Mr.G.Vinodkumar for M/s.G.Vijay Anand Associates For the Petitioner in WP 11397/18 : Mr.A.V.Arumugam For the Petitioner in WPs 1186, 1187/18 : Mr.K.Seetha Ram For the Petitioner in WPs 24972 to 24975, 25211/17, 973, 5232, 9826,9828, 14547,14570, 15602,17296, 27765, 27766,27783, 27787,27797, 30462,30467, 31791, 30473, 31779,31784/18 : Mr.Velayutham Pichaiya For the Respondents-1 2 in WPs 21446,32455,32112/17, 531/18, R-1 to R-3 in WPs 1186, 1187, 11397/18, R-1 to R-5 in WPs 9826,15602,27765, 27766, 27783, 27787,27797, 30462, 30467, 30473, 17296/18, R-1 to R-4 in WPs 25211/17, 973,4371, 5232/18, 24972 to 24975/17, 1666 to 1668, 31779, 31784,31791, 15262 to 15265/18, R-1 to R-4 and R-6 in WP 4280, 4708, R-1 to R-6 in WPs 14547, 14570/18 : Mr.P.T.Ramkumar For the R-1 to R-5 in WP 9828/18 : Ms.T.P.Savitha For the R-5 in WPs 24972 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods or supply of services as referred to in Schedule II.] [(1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.] (2) Notwithstanding anything contained in sub-section (1), (a) activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services. (3) Subject to the provisions of 5 [subsections (1), (1A) and (2)], the Government may, on the recommendations of the Council, specify, by notification, the transactions that are to be treated as- (a) a supply of goods and not as a supply of services; or (b) a supply of services and not as a supply of goods. 5. With reference to Section 7(1-A) Schedule II deals with activities or transactions to be treated as supply of goods or supply of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land or renting of an immovable property, both falls under the supply of services. 7. A conjoint reading of Section 7 as well as the Schedule II unambiguously portrays that license is granting of supply and as per Schedule II, license to occupy land and renting of an immovable property are supply of services. 8. With reference to the above provisions of the CGST Act, the Deputy Commissioner of Central Tax and Customs, issued Press Note in C.No.V/30/155/2017-CC (VZ) Media dated 17.11.2017, which reads as under:- Doubts have been raised regarding the collection of GST on parking charges at Railway Station and such public places. It is informed that under the GST law, Parking Lot Services fall under HSN Code No.996743 and liable to GST @ 18% on the parking charges paid. In this connection, contractors of Parking Lot Services are advised to obtain GST Registration and to pay the GST as applicable on all parking charges collected by them. In case of any difficulty, they may contact the local Central GST Seva Kendras in the matter of Registration, filling of Returns, Payment of Taxes, etc. 9. Following the above Press Note, Ministry of Railways, more specifically, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.2017/AC-II/01/6/Cab.Sec dated 02.08.2017 and the same reads as under:- PMO vide their ID Note No.280/31/C/02/2017-ES.I Vol.III dated 25.07.2017 has brought out certain social media references received in their office relating to either not charging GST or charging both GST and VAT. It has been advised that appropriate action may be taken in this regard. This matter has been examined in the Accounts Directorate and it is mentioned that instructions for levy of GST for services rendered by Railways to outside agencies viz., on Transportation of Passenger, Transportation of Goods and Rental of Immovable Property has been issued by the concerned Directorate of Railway Board from time to time. However, it is also equally important that the agency appointed by Railways to render a services viz., Parking Contractors, Catering Stall (mobile or static), Food Courts at Railway Station or establishments also levy the GST Rates appropriately as per the GST Rules. In other words, these Contractors have to generate the Tax Invoice containing their GSTIN, CGST/SGST- UTGST or IGST amount duly bifurcated, etc so that there is no case for any complaint from any quarters. It is therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced license fee of 10% every year. The Licensee/Licensees shall also duly pay during the continuance of this license all cesses, rates, water charges, taxes and other charges or taxes in respect of the said premises or proportion of all cesses, rates, water charges, taxes and other charges of taxes of the said premises if Administration in giving such intimation to recover such charges of taxes shall not prejudice and right of the Administration to recover the correct amount of such charges or taxes due from the licensee/licensees from the date of occupation by him/them of the said premises. The cess and other charges will be payable annually with first installment while the license fee will be payable in quarterly installments every year. 17. It is further admitted that the writ petitioners had agreed for the terms and conditions stipulated in the agreement and as per the said agreement, the licensee shall pay during the continuance of the license all cesses, rates, water charges, taxes and other charges or taxes in respect of the said premises. Thus, it is made clear and further admitted that they are liable to pay taxes as admissible. 18. The respective learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it petitioners are not liable to pay tax as demanded by the Southern Railways. 24. Learned counsel for the writ petitioners relied on the judgments of the Hon'ble Supreme Court of India, in the case of Mannalal Khetan and Others vs. Kedar Nath Khetan and Others [(1977) 2 SCC 424] , wherein it has been held in paragraph-21, which reads as under:- 21. If anything is against law though it is not prohibited in the statute but only a penalty is annexed the agreement is void. In every case where a statute inflicts a penalty for doing an act, though the act be not prohibited, yet the thing is unlawful, because it is not intended that a statute would inflict a penalty for a lawful act. 25. In the case of P.C.Paulose, Sparkway Enterprises vs. Commissioner of Central Excise and Customs [2011 (21) STR 353 (SC)] , the Supreme Court, in paragraphs 5, 13, 14, 15 and 16, held as under:- 5. It is evident from the aforesaid terms and conditions of the agreement that the appellant was granted licence by AAI to collect the admission ticket charges so as to provide amenities and facilities to the passengers and visitors at the airport. Under the said agreement, the appellant wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26. The CESTAT, Principal Bench of the Tribunal, New Delhi in the case of Airport Authority of India vs. Commissioner of Service Tax, Delhi [2015 (39) STR 35 (Tri.-Del.) , in paragraphs-22.3 and 22.5 held as under:- 22.3 Inside an Airports/Civil Enclaves there are a number of business establishments like Restaurants, Duty free Shops, Book Shops and other Shops, Counters of the Airlines, Money Changers etc. All these persons have been given space inside the Airports/Civil Enclave on rent, which is to be used for the purpose of their business. Some spaces have been given for display of hoardings/advertisements. 22.5 With regard to charging of service tax on the amount received by the appellant from the concessionaires/licensees managing access to the visitors' gallery, car parking and issue of season tickets and temporary passes, it is pleaded by the appellant that in terms of the Apex Court's judgment in case of P.C.Paulose, Sparkway Enterprises vs. CCE (supra), it is the licensees, authorised by the appellant who manage the services, who would be liable to pay service tax and not the appellant who are only charging a fixed amount from them as licensee fee/royalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the Railway Board, which were extracted in the aforementioned paragraphs of this common order. 31. It is further contended that the Southern Railways has to pay the GST Tax with reference to the license fee collected from the contractors and the contractors are liable to pay the service tax with reference to the parking fee collected from the customers, who all are end users. Thus, both the Railways as well as the contractors are bound to pay, if they are falling within the ceiling contemplated under the provisions of the CGST Act. 32. This being the Scheme of the CGST Act, there is no reason whatsoever to grant exemption as far as these contractors are concerned and the grounds raised for exemption, is not contemplated and the writ petitioners are attempting to mis-interpret the provisions of the CGST Act and therefore, the writ petitions are liable to be dismissed. 33. The respective learned counsel appearing on behalf of the GST, strenuously contended that the provisions of the CGST Act are unambiguous in the matter of recovery of service tax, as applicable and they relied upon the definition of 'Services' as contemplated under Section 2(102) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is concerned, the Courts are expected to adopt strict interpretation of law. Liberal interpretation is impermissible, which can be adopted only in respect of certain welfare legislations and as far as the tax laws are concerned, it is to be borne in mind that strict interpretation of provisions are to be adopted, so as to recover taxes from the assessees by following the procedures contemplated. 41. In the present cases, liability of the licensees are well enumerated with reference to Section 7 and Schedule II to the Act. As discussed above, when the liability is unambiguous and the nature of services are also falling within the scope of Section 7 r/w Schedule II, then there is no reason to consider the claim of the writ petitioners for invoking Section 32 of the Act. 42. Section 32 deals with prohibition of unauthorised collection of tax. Here the question of unauthorised collection does not arise at all. When the collection of tax is in consonance with the provisions of the Act, the provisions of Section 32, cannot be invoked at all. Thus, the arguments with reference to Section 32 stands rejected. 43. The judgments referred to are not relatable in respect of the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in respect of the parking slot services. Such contractors are bound to register their name under the CGST Act, by following the procedures contemplated therein. 48. By repetition, it is to be reiterated that the Southern Railways is bound to pay service tax on the license fee collected from the contractors for whom license is granted to run vehicle parking in the premises of the Southern Railways and such contractors, who all are the licensees, are bound to register their names under the CGST Act and on such registration, they are bound to pay service tax for the parking fee collected from the end users. 49. Thus, there are two services involved in the entire transactions and the first service is from the Railway to the contractors and the second service is from the contractors to the customers/end users. 50. As far as the exempted services under the provisions of the Act, are concerned provided by the contractors to the customers/end users, in such an event, the contractors are not liable to pay tax to the GST Department. However in respect of the license fee, the Railway is liable to pay service tax to the GST by collecting from the contractors on the license fee. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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