SCA/3829/1998 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No.3829 of 1998 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA Sd/- HONOURABLE MR.JUSTICE H.B.ANTANI Sd/- =================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? NO 2 To be referred to the Reporter or not ? NO 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? NO 5 Whether it is to be circulated to the civil judge ? NO =================================================== LAKHANPAL NATIONAL LTD & 1 - Petitioner(s) Versus UNION OF INDIA & 2 - Respondent(s) =================================================== Appearance : MR RAKESH GUPTA with MS POOJA GUPTA, ADVOCATES, for M/S TRIVEDI & GUPTA for the Petitioners MR PURVISH J MALKAN for Respondent(s) : 1 - 3. =================================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE H.B.ANTANI Date : 20/06/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA) SCA/3829/1998 2/3 JUDGMENT (1) This petition has been preferred by a Limited Company which is engaged in the business of manufacturing Dry Cell Battery. During the course of business of the petitioner-Company, the petitioner-Company is required to avail of services of transport operators. The petition challenges the provisions of Rule 2 of the Service Tax (Eighth amendment) Rules, 1997, which imposed a liability on the person availing of the services instead of the liability being fastened on the service provider. (2) Heard learned advocates appearing for the respective parties. (3) It is not necessary to set out facts and contentions in detail considering the fact that the issue is no longer res integra. In the case of LAGHU UDYOG BHARATI vs. UNION OF INDIA, reported in 1999 (112) ELT 365 (SC) the Apex Court has laid down as follows: “13. Section 94 gives the Central Government power to make the rules. These rules are to be made for carrying out the provisions of the chapter. The chapter relates to taxing the services which are provided. The tax is on the value of the services and it is only the person who is SCA/3829/1998 3/3 JUDGMENT providing the service can be regarded as an assessee. The rules, therefore, cannot be so framed which do not carry out the purpose of the chapter and cannot be in conflict with the same. 14, We have no hesitation in holding that the provisions of Rule 2(d)(xii) and (xvii), Insofar as it makes persons other than the clearing and forwarding agents or the persons other than the goods transport operator as being responsible for collecting the service tax, are ultra vires the Act itself. The said sub-rules are accordingly quashed.” (4) In the aforesaid set of circumstances, the petition is required to be allowed following the enunciation by the Apex Court declaring the rule ultra vires. The petition is accordingly allowed. Rule made absolute. Interim Relief stands confirmed. There shall be no order as to costs. Sd/- [D.A. MEHTA, J] Sd/- [H.B.ANTANI, J] *** Bhavesh*