2016 (11) TMI 833 - HC - Service Tax

Levy of service tax - cargo handling services - Held that - Firstly, the issue was between the FCI and the Government whether the service tax could be recovered from FCI directly or not. In this context, the present applicant had no direct connection. We had struck down the Central Government s attempt of recovering the service tax from FCI for the reasons stated in the order. The grievance of the applicant that the Government cannot recover such service tax from the applicant was neither a subject matter of such petition, nor could have been examined at the hands of the applicant even if was joined as a respondent. It is an independent angle of dispute between the applicant and the Government. Likewise, we are conscious that there are multiple disputes between FCI and the contractor. Such disputes were not and at any rate could have been made part of the FCI s petition. The request of recall of the order is refused. However, it is clarified that none of the observations made in the said order would bind the present applicant in its defense in the disputes with the Government or with FCI as the case may be - application disposed off.

Summary

Issues:
1. Recall or review of judgment sought by the applicant on the ground of jeopardized vital interests.
2. Recovery of unpaid service tax from Food Corporation of India (FCI) challenged.
3. Applicant not joined as a respondent in the petition filed by FCI.
4. Grievance of the applicant regarding service tax recovery from FCI.
5. Decision on recalling the order and its implications on the applicant's disputes with the Government or FCI.

Analysis:
1. The applicant sought a recall or review of the judgment passed in a special civil application, claiming that their vital interests were jeopardized as they were not joined as a party respondent. The central issue revolved around the recovery of service tax in relation to cargo handling services provided to FCI.

2. FCI challenged the Central Government communications seeking to recover unpaid service tax, contending that the tax was not payable by them as it had already been recovered by the contractor. The judgment observed that the invocation of Section 87 of the Finance Act, 1994 for recovery from FCI was incorrect, leading to the quashing of the recovery notices issued by the Government.

3. The applicant, as the contractor, was not included as a respondent in FCI's petition. The applicant's grievance was that since FCI had already recovered the service tax from them, they should not be liable to pay it to the Central Government. However, the court found that the issue between FCI and the Government did not directly involve the applicant, and therefore, the order was not to be recalled.

4. The court declined the request for recalling the order, emphasizing that the applicant's dispute with the Government regarding service tax recovery was not the subject matter of the petition. The judgment clarified that the observations made would not bind the applicant in their defense in disputes with the Government or FCI, recognizing the existence of multiple disputes between FCI and the contractor.

5. Ultimately, the application for recall was refused, but it was clarified that the order would not restrict the applicant in their defense in disputes with the Government or FCI. The judgment highlighted the independent nature of the applicant's dispute with the Government, separate from the issues addressed in FCI's petition, thereby concluding the matter.