IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 20.9.2011 CWP No. 17319 of 2011 Prem Kumar Maini ……petitioner vs. The State of Punjab and anr …..Respondents CORAM: - HON’BLE MR. JUSTICE HEMANT GUPTA HON’BLE MR. JUSTICE JASWANT SINGH Present: - Mr. Sajal Koser, Advocate for the petitioner. HEMANT GUPTA, J Challenge in the present petition is to the order dated 9.8.2011 (Annexure P-10), whereby the petitioner was served with a notice of termination of Management Contract granted to the petitioner for operation and maintenance of bus terminal. The petitioner also challenges the communication dated 26.8.2011 (Annexure P-13) declining the representation of the petitioner. Petitioner was awarded a contract for Operation and Maintenance of Jagraon Bus Terminal on 13.10.2008. A lease deed was also executed in favour of the petitioner on 20.11.2008. In terms of lease, the petitioner is liable to pay a sum of Rs. 11,30,000/- as quarterly contract fee to respondent No. 2. CWP No. 17319 of 2011 The Operation and Maintenance Contract has been terminated vide the communication dated 9.8.2011 (Annexure P-10) for the reasons that the petitioner has not deposited the service tax along with the fine amount as per the concession agreement but with a proviso that the petitioner can take suitable steps to remedy the situation. In the representation dated 16.8.2011 (Annexure P-11), it is the stand of the petitioner that in terms of the service tax laws, the petitioner is not liable to pay the service tax. The service tax is to be levied on renting, selling of space for advertisement etc and not on the management, maintenance and repair of transport terminals. It is submitted that the petitioner shall discharge any liability on account of service tax and in support of the said fact furnished indemnity bond along with the representation vide communication dated 26.8.2011 (Annexure P-13). The Petitioner was called upon to deposit service tax within 30 days on 19.5.2011 in terms of Clause 15.3 of the Management Contract and subsequently, the termination notice was issued under Clause 15.4 of the said contract. The petitioner was again informed to deposit the amount of service tax. Learned counsel for the petitioner has vehemently argued that in terms of the contract, the liability to deposit the service tax is that of the petitioner and that the respondent cannot call upon the petitioner to pay service tax. It is 2 CWP No. 17319 of 2011 contended that service tax is levy by the Central Government, which cannot be demanded by the State Government undertaking and that the contract cannot be terminated for non payment of such amount to the Central Government. The demand for payment of service tax or the consequence of non deposit of service tax has to be borne by the petitioner alone. Therefore, the contract cannot be terminated for such alleged default. It is contended that it would be the subject matter of interpretation that whether the petitioner is liable to pay service tax of services under the contract or in respect of renting of building alone. We have heard learned counsel for the parties and do not find any merit in the present petition. In terms of the agreement between the parties, the liability to pay service tax is that of the petitioner. The petitioner was informed on 27.2.2009- Annexure P4 to deposit service tax. The petitioner was again informed vide Annexure P- 7 dated 2.2.2010. The department has obtained clarification from the Excise Department, appended with the writ petition as Annexure P-6 dated 10.6.2011. Though the liability is of the petitioner but the petitioner cannot take stand not to deposit the tax amount so as to create embarrassment for the State Instrumentality. The petitioner has been given opportunity to deposit the tax amount but has still not availed the same. 3 CWP No. 17319 of 2011 It appears that the entire dispute raised by the petitioner is in respect of levy of service tax but the petitioner has not impleaded the revenue authorities, charging service tax. Therefore, we do not find that it is a fit case where the extra ordinary writ jurisdiction of this Court should be permitted to be invoked by the petitioner. Dismissed as withdrawn with liberty to the petitioner to avail such other remedy as may be available to the petitioner according to law. (HEMANT GUPTA) JUDGE (JASWANT SINGH) JUDGE 20.9.2011 preeti 4