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TMI Blog2016 (8) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... plitting up of the composite transaction into the provision of service element and the supply of food. The Respondents are justified in contending that as far as the interpretation of Article 366 (29A) (f) of the Constitution is concerned, the decision in Tamil Nadu Kalyana Mandapam Association v. Union of India (supra) fully supports their stand. The Parliament has further made the legal position explicit by inserting Section 66 E (i) of the FA read as it were with Section 65 (22) and 65 (44) of the FA. It states that the "service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity” is a 'declared' service. The legislative carving out of the service portion of the composite contract of supply of food and drinks has sound constitutional basis as explained in the aforementioned decisions of the Supreme Court. Even if this is viewed as Parliament deploying a legal fiction, it is legally permissible. Thus it is not possible to accept the contention of the Petitioners that Parliament lacks the legislative competence to enact Section 65 (105) (zzzzv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name called to any provision, accommodation for a continuous period of less than three months has been made amenable to service tax. 1.2 The additional prayers in the writ petition are for a declaration that Section 66 E (i) of the FA to the extent it seeks to constitute a service portion in an activity of supply of food or other articles as declared service to be bad in law. The Petitioners seek a declaration that Rule 2C of the Service Tax (Determination of Value) Rules, 2006 is invalid. Profile of the Petitioners 2.1 Petitioner No.1 is the Federation of Hotels and Restaurants Association of India, a registered association whose members are a number of hotels spread all over the country. Petitioner No.2, the Leela Palace, Chanakya Puri, New Delhi is a unit of Hotel Leela Venture Limited which runs 5-star hotels all over the country. Petitioner No.3 is Rodeo, a restaurant which is part of the chain operating in the National Capital Territory of Delhi. 2.2 Several members of the Petitioner No.1 Association run hotels which provide both lodging and meals to the residents. They also operate airconditioned restaurants where meals are served to non-residents and casual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 and 248 of the Constitution read thus: 245. (1) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State. (2) No law made by Parliament shall be deemed to be invalid on the ground that it would have extra-territorial operation. 246. (1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the Union List ). (2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the Concurrent List ). (3) Subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the State List ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of food and beverages. For e.g. the Section 2 (zc) of the Delhi Value Added Tax Act 2004 defines 'sale' thus: (zc) sale with its grammatical variations and cognate expression means any transfer of property in goods by one person to another for cash or for deferred payment or for other valuable consideration (not including a grant or subvention payment made by one government agency or department, whether of the central government or of any state government, to another) and includes- (i) to (vi).... (vii) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration. Impugned provisions of the Finance Act 1994 9. By the Finance Act 2011the following sub-clauses, (zzzzv) and (zzzzw) were inserted in sub-section 105 of Section 65 of the FA making the following transactions taxable as service, viz., the service provided: (zzzzv)- to any person, by a restaurant, by whatever name called, having the facility of air-conditioning in any pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 The new levy is directed at services provided by high-end restaurants that are air-conditioned and have license to serve liquor. Such restaurants provide conditions and ambience in a manner that service provided may assume predominance over the food in many situations. It should not be confused with mere sale of food at any eating house, where such services are materially absent or so minimal that it will be difficult to establish that any service in any meaningful way is being provided. 1.5 It is not necessary that the facility of air-conditioning is available round the year. If the facility is available at any time during the financial year the conditions for the levy shall be met. 1.6 The levy is intended to be confined to the value of services contained in the composite contract and shall not cover either the meal portion in the composite contract or mere sale of food by way of pick-up or home delivery, as also goods sold at MRP. Finance Minister has announced in his budget speech 70% abatement on this service, which is, inter alia, meant to separate such portion of the bill as relates to the deemed sale of meals and beverages. The relevant notification will be iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory by one person to another and collected in such manner as may be prescribed. ............ Declared services. 66E. The following shall constitute declared services, namely:- ...... (i) service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity. 14. By a Notification No. 12/2012-Service Tax dated 17th March 2012 the Union of India exempted various taxable services from the whole of the service tax leviable under Section 66B of the Finance Act, 1994. The following two activities, which were taxable services were exempted by the said notification: 18. Services by way of renting of a hotel, inn, guest house, club, campsite or other commercial places meant for residential or lodging purposes, having declared tariff of a room below rupees one thousand per day or equivalent; 19. Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central airheating in any part of the establishment, at any time during the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outdoor catering. 60 Explanation 1.- For the purposes of this rule, total amount means the sum total of the gross amount charged and the fair market value of all goods and services supplied in or in relation to the supply of food or any other article of human consumption or any drink (whether or not intoxicating), whether or not supplied under the same contract or any other contract, after deducting- (i) the amount charged for such goods or services, if any; and (ii) the value added tax or sales tax, if any, levied thereon: Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles. Explanation 2.- For the removal of doubts, it is clarified that the provider of taxable service shall not take CENVAT credit of duties or cess paid on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986). 17. These further changes by the Finance Act, 2012 have also been challenged in the present writ petition. The additional prayers in the amended writ petition are for a declaration that Section 66E of the FA to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ambit of clause (f) of Article 366 (29A). 21. Mr Venkataraman pointed out that the enactment by the Parliament by the Finance Act, 2011 by which two new transactions were brought within the net of service tax with effect from 1st May 2011 in the form of Sections 65 (105) (zzzzv) and (zzzzw) was beyond its legislative competence. He submitted that resort could not be had to the residue Entry 97 of List I (Union List) of the Seventh Schedule with respect to a matter fully covered by Entry 54 of List II (the State list). He pointed out that Entry 92C of List I which provides Taxes on Services is yet to be notified and in any event could not make any difference to the legal position. According to him, it is not possible to extricate and assign separate value of the various aspects associated with the provisions of service. 22. Referring to Section 65(105) (zzzz) he pointed out that the renting of immovable property excludes building used solely for residential purposes and building used for the purposes of accommodation including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities from the ambit of service tax. With the above services havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be claimed for Parliament by resort to the residuary power, the legislative incompetence of the State legislative must be clearly established. Emphasising the 'pith and substance' and the 'dominant nature' tests, he submitted that in the present case the transaction in pith and substance was entirely one of sale as defined under Article 366(29A) (f) and therefore the State alone was competent to levy sales tax to the exclusion of the Union. He also referred to the decision in Bharat Sanchar Nigam Ltd. v. Union of India (2006) 3 SCC 1 , which according to him held that the Union did not have any power to tax a transaction the dominant nature of which was the sale of goods. 25. According to Mr Venkataraman Rule 2C of the 2006 Rules which deemed 40% of the total value of the transaction to be attributable to the value of services was arbitrary and without any basis and was liable to be quashed. Likewise, there was no basis for fixing the figure of ₹ 1,000 per day tariff for the exemption from service tax on accommodation in terms of the notifications dated 17th March and 6th June 2012. 26. Mr. Venkataraman sought to distinguish the judgment of the Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mphasised that the objects and reasons of the 46th amendment to the Constitution make it clear that the phrase service used in Article 366 (29A) (f) emphasises the segregable nature of the composite contract. The entire contract was not deemed to be a sale of goods but only the supply of goods as part of the service including the service provided in a restaurant. The State can levy sales tax only on the goods portion in the case of restaurant service and the Union is constitutionally entitled to tax the service portion. The stand of the Respondents is that if the State took cognizance of the meaning of tax on supply of goods and services under Article 366(29A) (f) and limited their taxation in the case of restaurant service to the goods portion leaving the service portion for taxation by the Union then the issue of double taxation would not arise. Likewise, as far as short-term accommodation (hotel) service is concerned, the power of the State to impose tax on the aspect of luxuries would not preclude the Union to levy tax on the service. A reference is made to the decisions in Federation of Hotel Restaurant Association of India v. Union of India 1988 AIR 1291 and Associatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the Food Serving Services' and 'Beverages Serving Services' for consumption on the premises are being categorized under Groups 632 and 633. The International Standard Industrial Clarification ('ISIC ) of all economic activities also classifies food and beverages service activities under Division 65 and more specifically under Class 5610 and 5630. (viii) What is being taxed by the Union is the activity of providing shortterm accommodation and not luxury provided in a hotel. Service tax is applied only on the taxable value arrived at after abatement. It is possible that the activity may be service for the purpose of one statute and sale for the purpose of another. The same activity could be treated as service in one situation and as sale in another. (ix) Levy of service tax falls under Entry 97 of List I read with Article 248 of the Constitution of India as held in Tamil Nadu Kalyana Mandapam Association v. Union of India (supra) Gujarat Ambuja Cements Ltd. v. Union of India (2005) 4 SCC 214 and All India Federation of Tax Practitioners v. Union of India (2007) 7 SCC 527. In terms of Tamil Nadu Kalyana Mandapam Association (supra), if an aspect i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt held this to be a composite contract which could not be split up and taxed as one for sale of goods and another for service in the absence of any intention to separately sell the food. The transaction was, therefore, held to be outside the purview of the State sales tax. 32. The issue was re-visited by the Supreme Court in Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi (supra). The Supreme Court examined whether under the Bengal Finance Sales Tax Act, 1941 the supply of food in a restaurant was exigible to tax as a sale. The Supreme Court followed the earlier decision in State of Himachal Pradesh v. Associated Hotels of India Ltd. (supra) and held that the true essence of the transaction was service and did not involve a transfer of the general property in the food supplied. The Court observed: 6. It has already been noticed that in regard to hotels this Court has in M/s. Associated Hotels of India Limited adopted the concept of the English law that there is no sale when food and drink are supplied to guests residing in the hotel. The court pointed out that the supply of meals was essentially in the nature of a service provided to them and could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n those facts whether the sale of the food supplied is intended . 34. It is not in dispute that with a view to overcome the aforementioned decisions in State of Himachal Pradesh v. Associated Hotels of India (supra) and Northern India Caterers (India) Ltd. v. Lt. Governor (supra) and other decisions, Parliament inserted Article 366 (29 A) (a) to (f) by the 46th Amendment to the Constitution. This is apparent from the Statement of Objects and Reasons (SOR) for the 46th Amendment, the relevant portions of which read as under: 2. By a series of subsequent decisions, the Supreme Court has, on the basis of the decision in Gannon Dunkerley held various other transactions, which resemble, in substance, transactions by way of sales, to be not liable to sales tax. As a result of these decisions, a transaction, in order to be subject to the levy of sales tax under Entry 92-A of the Union List or Entry 54 of the State List, should have the following ingredients, namely, parties competent to contract, mutual assent and transfer of property in goods from one of the parties to the contract to the other party thereto for a price. 3. This position has resulted in scope for avoida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court which was sought to be neutralised or modified. Sub-clause (a) is the outcome of New India Sugar Mills Ltd. v. and Vishnu Agencies (P) Ltd. v. CTO 14 STC 316 . Sub-clause (b) is the result of Gannon Dunkerley Co. 1959 SCR 379 . Sub-clause (c) is the result of K.L. Johar and Co. v. CTO 1965 (2) SCR 112 . Sub-clause (d) is consequent to A.V. Meiyappan v. CIT 20 STC 115 . Sub-clause (e) is the result of Jt. Commercial tax Officer v. YMIA (1970) 1 SCC 462 . Sub-clause (f) is the result of Northern India Caterers (India) Ltd.v. Lt. Governor of Delhi 36. Importantly, in para 13 of the SOR for the 46th Amendment to the Constitution it was observed that the proposed amendments would help in the augmentation of the State revenues to a considerable extent. The focus was on ensuring that State sales tax was leviable on the portion of supply of food and drinks even where it was as a part of a composite catering contract. The focus at that stage was not on capturing any portion of that composite contract for the purpose of levy of service tax. This was 1982 and service tax was not thought of till a decade later. Therefore, it is difficult to imagine that Parliament ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rude upon this field. 40. Specific to the challenge to the levy of service tax by Parliament on the service portion of a composite contract the following passage in Commissioner, Central Excise Customs, Kerala v. Larsen Toubro Ltd. (2016) 1 SCC 170 is instructive: 15.At this stage, it is important to note the scheme of taxation under our Constitution. In the lists contained in the 7th Schedule to the Constitution, taxation entries are to be found only in lists I and II. This is for the reason that in our Constitutional scheme, taxation powers of the Centre and the States are mutually exclusive. There is no concurrent power of taxation. This being the case, the moment the levy contained in a taxing statute transgresses into a prohibited exclusive field, it is liable to be struck down. In the present case, the dichotomy is between sales tax leviable by the States and service tax leviable by the Centre. When it comes to composite indivisible works contracts, such contracts can be taxed by Parliament as well as State legislatures. Parliament can only tax the service element contained in these contracts, and the States can only tax the transfer of property in goods ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply but supply of goods . It is arguable that the expression supply of goods connotes that the dominant nature of the transaction is the transfer, delivery or supply of goods and the provision of service is only incidental to such transfer, delivery or supply. The dominant nature test was emphasised in Bharat Sanchar Nigam Limited v. Union of India (supra) However, in Larsen and Toubro Limited v. State of Karnataka (2014) 1 SCC 708, the Supreme Court held: Whether the contract involved a dominant intention to transfer the property in goods, in our view, is not at all material. It is not necessary to ascertain what is the dominant intention of the contract. Even if the dominant intention of the contract is not to transfer the property in goods and rather it is the rendering of service or the ultimate transaction is transfer of immovable property, then also it is open to the States to levy sales tax on the materials used in such contract if it otherwise has elements of works contract. 46. By the same logic even if some part of the composite transaction involves the rendering of service, there should be no difficulty in recognising the power of the Union to brin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the bread, butter, mustard and cheese in the plate is very much less, but he orders it all the same. He pays ₹ 50 for its supply and it is on ₹ 50 that the restaurant-owner must be taxed . 49. The crucial sentence in the above passage is: The tax, therefore, is on the supply of food or drink and it is not of relevance that the supply is by way of a service or as part of a service. In our view, therefore, the price that the customer pays for the supply of food in a restaurant cannot be split up as suggested by learned counsel. The Court was careful to emphasise that the subject of the levy was supply of food and drink. The reluctance to recognise the splitting of the transaction was with reference to the 'price' paid for the transaction, which is understandable if the break-up was not provided by the seller. This becomes even more evident when the following sentence is read carefully. The Court observed: The supply of food by the restaurant-owner to the customer though it may be a part of the service that he renders by providing good furniture, furnishing and fixtures, linen, crockery and cutlery, music, a dance floor and a floor show, is what is the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds it convenient to impose that duty at the moment when the excisable article leaves the factory or workshop for the first time on the occasion of its sale.... 32. Referring to the aspect doctrine Laskin s Canadian Constitutional Law states: The aspect doctrine bears some resemblance to those just noted but, unlike them, deals not with what the matter is but with what it comes within .... (p. 115) ... it applies where some of the constitutive elements about whose combination the statute is concerned (that is, they are its matter ), are a kind most often met with in connection with one class of subjects and others are of a kind mostly dealt with in connection with another. As in the case of a pocket gadget compactly assembling knife blade, screwdriver, fishscaler, nailfile, etc., a description of it must mention everything but in characterising it the particular use proposed to be made of it determines what it is. (p. 116) ... I pause to comment on certain correlations of operative incompatibility and the aspect doctrine. Both grapple with the issues arising from the composite nature of a statute, one as regards the preclusory impact of federal law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that tax on the sale of the goods involved in the said service can be levied does not mean that a service tax cannot be levied on the service aspect of catering. 53. Mr. Venkataraman, tried to distinguish the above decision in Tamil Nadu Kalyana Mandapam Association by pointing out that the question there arose in a different context. He relied on the following passage in the decision to urge that there was a difference between the provision of outdoor catering service in a Mandapam and the supply of food and drinks in a restaurant: 55. A customer goes to a mandap-keeper, say a star hotel, not merely for the food that they will provide but for the entire variety of services provided therein which result in providing the function to be solemnized with the required effect and ambience. Similarly the services rendered by outdoor caterers is clearly distinguishable from the service rendered in a restaurant or hotel inasmuch as, in the case of outdoor catering service the food/eatables/drinks are the choice of the person who partakes the services. He is free to choose the kind, quantum and manner in which the food is to be served. But in the case of restaurant, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 57 of the said judgment which reads as under: A tax on services rendered by mandap-keepers and outdoor caterers is in pith and substance, a tax on services and not a tax on sale of goods or on hire purchase activities. Section 65 clause 41 sub clause (p) of the Finance Act, 1994, defines the taxable service (which is the subject matter of levy of service tax) as any service provided to a customer by a mandap-keeper in relation to use of a mandap in any manner including the facilities provided to a customer in relation to such use also the services, if any, rendered as a caterer. The nature and character of this service tax is evident from the fact that the transaction between a mandap-keeper and his customer is definitely not in the nature of a sale of hire purchase of goods. It is essentially that of providing a service. In fact, as pointed out earlier, the manner of service provided assumes predominance over the providing of food in such situations which is a definite indicator of the supremacy of the service aspect. The legislature in its wisdom noticed the said supremacy and identified the same as a potential region to collect indirect taxes. Moreover, it has been a we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lidated. All the clauses of Article 366 (29A) serve to bring transactions where one or more of the essential ingredients of a sale as defined in the Sale of Goods Act 1930 are absent, within the ambit of purchase and sales for the purposes of levy of sales tax. To this extent only is the principle enunciated in Gannon Dunkerly limited. The amendment especially allows specific composite contracts viz. works contracts (Clause (b)), hire purchase contracts (Clause (c)), catering contracts (Clause (e)) by legal fiction to be divisible contracts where the sale element could be isolated and be subjected to sales tax. Gannon Dunkerley survived the 46th Constitutional Amendment in two respects. First with regard to the definition of 'sale' for the purposes of the Constitution in general and for the purposes of Entry 54 of List II in particular except to the extent that the clauses in Art. 366(29A)operate. By introducing separate categories of 'deemed sales', the meaning of the word 'goods' was not altered. Thus the definitions of the composite elements of a sale such as intention of the parties, goods, delivery etc. would continue to be defined according to kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated and after ascertaining this, the court is to assume all those facts and consequences which are incidental or inevitable corollaries to the giving effect to the fiction. 59. Thus it is not possible to accept the contention of the Petitioners that Parliament lacks the legislative competence to enact Section 65 (105) (zzzzv) of the FA with a view to bringing the service component of the composite contract of supply of food and drinks by an air-conditioned restaurant within the service tax net. 60. Next the challenge to Rule 2-C of the 2006 Rules requires to be examined. The case of the Petitioners is that the said rule is bad in law as it arbitrarily attributes 40% of the value of the composite contract of supply of food and drinks to the service component. The legal basis for this challenge is to be found in the following passage in Govind Saran Ganga Saran v. CST 1985 Supp SCC 205: 6. The components which enter into the concept of a tax are well known. The first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy, the second is a clear indication of the person on whom the levy is imposed and who is obli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of service tax. Where the service tax should be @ 12.36% it is, after abatement, 4.94%. Therefore it is not right that the measure of tax is the same. This is notwithstanding the settled legal position that value of taxable service is not determinative of the character of the levy. In Association of Leasing Financial Service Companies v. Union of India (supra) the Supreme Court observed: 45 (i) The measure of taxation does not affect the nature of taxation and, therefore, the manner of quantification of the levy of service tax has no bearing on the factum of legislative competence. 63. For all the aforementioned reasons, the Court upholds the constitutional validity of Section 65 (105) (zzzzv) and Section 66 E (i) of the FA read with Section 65 (22) and 65 (44) thereof and Rule 2 C of the 2006 Rules 2006. Challenge to the validity of Section 65 (105) (zzzzw) of the FA 64. Turning now to the challenge to Section 65 (105) (zzzzw) of the FA by which the service tax is sought to be levied on short-term accommodation provided in a hotel, it must be noticed at the outset that main contention of the Petitioners is that levy of tax on luxuries as contemplated under Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zzzw) followed by the expression for a period of less than three months . However, such provision of short-term accommodation of less than three months is by no means exempt from luxury tax under the DTL Act. The very same taxable event of providing service by way of accommodation in a hotel etc. is the subject matter of both levies viz., luxury tax under the DTL Act and service tax under the FA. 68. Consequently Section 65 (105) (zzzzw) of the FA fails the foremost test of constitutionality of a Union tax as highlighted in International Tourist Corporation v. State of Haryana (supra ) that [b]efore exclusive legislative competence can be claimed for Parliament by resort to the residuary power, the legislative incompetence of the State legislative must be clearly established. Here the DTL Act which provides for levy of luxury tax on provision of the service of accommodation in a hotel etc. is traceable to Entry 62 of List II and the State is therefore competent to levy and collect luxury tax on such taxable event. 69. In Godfrey Phillips India Ltd. v. State of U.P., (2005) 2 SCC 515 , the Constitution Bench of the Supreme Court considered at length the meaning of ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;luxury' to not mean luxury articles or goods but the 'activity of enjoyment'. In this context the following observations of the Supreme Court in Assn. of Leasing Financial Service Companies v. Union of India, (2011) 2 SCC 352 are relevant: 38. In All-India Federation of Tax Practitioners case (2007) 7 SCC 527 this Court explained the concept of service tax and held that service tax is a value added tax ( VAT , for short) which in turn is a destination based consumption tax in the sense that it is levied on commercial activities and it is not a charge on the business but on the consumer. That, service tax is an economic concept based on the principle of equivalence in a sense that consumption of goods and consumption of services are similar as they both satisfy human needs. Today with the technological advancement there is a very thin line which divides a sale from service . That, applying the principle of equivalence, there is no difference between production or manufacture of saleable goods and production of marketable/saleable services in the form of an activity undertaken by the service provider for consideration, which correspondingly stands consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of a machinery provision for computation of tax on goodwill, in the context of Section 45 of the Income Tax Act 1961, for the it was observed: The character of the computation provisions in each case bears a relationship to the nature of the charge. Thus the charging section and the computation provisions together constitute an integrated code. When there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section. Otherwise one would be driven to conclude that while a certain income seems to fall within the charging section there is no scheme of computation for quantifying it. 74. The exemption from service tax on the provision of accommodation for a room having a declared tariff of less than ₹ 1,000 per day or equivalent is by Notification No. 12/2012 dated 17th March 2012. This is not provided in the Act or the Rules. In Commissioner of Central Excise and Customs, Kerala v. Larsen and Toubro Ltd. (2016) 1 SCC 170 , the Supreme Court affirmed the decision of the Orissa High Court in Larsen and Toubro Ltd. v. State of Orissa (2008) 12 VST 31 to the effect th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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