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Issues involved: Liability to pay Service Tax on transportation of goods by a company registered under the Companies Act.
Summary: The Chhattisgarh High Court heard a case involving the liability to pay Service Tax on transportation of goods by a company registered under the Companies Act. The appellant, a transporter, was awarded a tender by the Chhattisgarh State Civil Supplies Corporation Limited. The Corporation subsequently asked the appellant to deposit the Service Tax, leading to a writ petition being filed by the appellant which was later dismissed, resulting in the present writ appeal. The Court considered the arguments presented by both parties. The appellant contended that the liability to pay Service Tax lies with the Corporation, as he is merely a transporter and cannot be held responsible for the tax. However, the Court referred to the Service Tax Act and Rules, which clearly define taxable services and the liability to pay Service Tax. It was noted that the Corporation, being a company established under the Companies Act, is primarily liable to pay the tax. Furthermore, the Court examined the agreement between the appellant and the Corporation, which specified that the transporter would be responsible for paying any tax or obligation imposed by the State or Central Government. Based on this contractual provision, the Court held that the appellant is indeed liable to pay the Service Tax as per the terms of the agreement. In conclusion, the Court found no merit in the appeal and dismissed it, upholding the Corporation's right to demand the Service Tax payment from the appellant in accordance with the contract terms and legal provisions.
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