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TMI Blog2025 (2) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... t II or List III, including any tax not mentioned in either of those laws. But Entry 54 of List II specifically deals with taxes on the sale or purchase of goods other than newspapers, subject to the provisions of Entry 92A of List I, is a subject on which the State Legislature can enact laws. Entry 97 of List I derives its powers from Article 248 of the Constitution which gives power to the Parliament to make a law imposing a tax, not mentioned in either of two other lists namely List II and III and therefore Service Tax is leviable by the part. It has been well settled by now that there can be no question of conflict solely on account of two aspects of the same transaction being utilized by two legislatures for two levels, both of which may be taxes, fees or one which may be a tax and the other a fee falling within two fields of legislation, respectively available to them, as observed by the learned Single Judge at para 25 of the impugned order. There may be more than one taxable events in a single transaction, involving different kinds of taxes and different aspects of taxation. The Apex Court in IMAGIC CREATIVE PRIVATE LIMITED vs. COMMISSIONER OF COMMERCIAL TAXES [2008 (1) TM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring of these matters be deferred till after the said challenge is decided, one way or the other. He also draws our attention to a Co-ordinate Bench order dated 25.11.2019 in support of said request. 3. The Co-ordinate Bench order reads as under: "Heard learned counsels. 2. In terms of the impugned order dated 03.11.2014, passed in Writ Petition No.2033 of 2014 and connected matters, the learned Single Judge followed the judgment of this court in the case of CONFEDERATION OF REAL ESTATE DEVELOPERS' ASSOCIATION OF INDIA (KARNATAKA) AND ANOTHER VS. UNION OF INDIA, THROUGH JOINT SECRETARY, MINISTRY OF LAW AND JUSTICE BHAVAN AND OTHERS reported in ILR 2013 KARNATAKA 569, wherein inter-alia the High Court of Bombay in the case of INDIAN HOTELS AND RESTAURANTS VS. UNION OF INDIA, (W.P.No.2159 OF 2011 disposed off on 08.04.2014) and SKY GOURMET CATERING PRIVATE LIMITED VS. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, BENGALURU AND OTHERS reported in [(2011) 46 VST 35 (Karn.)], upheld the legislative competence in enacting the impugned law. 3. It is presently submitted that the aforesaid judgment of the Bombay High Court is questioned before this Hon'ble Supreme Court in C.A.No.108 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service (Non-Life insurance), Telephone Service & Stock Broker Service. Subsequently, this list grew: for the Financial Year 2003-2004 as many as 62 services were enlisted; for the following year it was 75; for the Financial Year 2011-12 this list consisted of 119 services. (c) The Service Tax law took giant leaps in the next seven years of its initiation both in terms of wider coverage and increase in tax rate. The newer additions to the Positive List of services often raised issues of overlap with the previously existing services confounding both sides as to whether some activities were taxed for the first time or were already covered under an earlier, even if under a little less specific head. With the accumulated experience, Budget 2012 ushered a new system of taxation of services, popularly known as Negative List. The next changes are a paradigm shift from the existing system where, only services of specified descriptions are subjected to tax. In the new system, all services, except those specified in the Negative List, are subject to taxation. 4.2 A THUMBNAIL DESCRIPTION OF RELEVANT PROVISIONS OF THE FINANCE ACT, 1994: (a) As already mentioned, 1994 Act enacts the law re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear. 4.3 Now let us see the text of impugned provisions: Sub-clauses (zzzzv) and (zzzzw) of Clause 105 of Section 65 of the Finance Act, 1994, as amended by Finance Act, 2011, would read as under: "(zzzzv) services provided or to be provided, to any person, by a restaurant, by whatever name called, having the facility of air-conditioning in any part of the establishment, at any time during the financial year, which has license to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in its premises; (zzzzw) Services provided or to be provided, to any person, by a hotel, inn, guest house, club or camp-site, by whatever name called, in relation to providing of accommodation for a continuous period of less than three months;" The aforesaid amendment was brought by the Parliament, in exercise of the residuary power under Entry 97 of List I of the Seventh Schedule to the Constitution, which has the following text: "Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists." 4.4 By virtue of the aforesaid amendment, the services enumerated in the impugned clauses were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale and purchase of goods... In other words, the operative words of the said sub-article is supply of goods and it is only supply of food and drinks and other articles for human consumption that is deemed to be a sale or purchase of goods. The concept of catering admittedly includes the concept of rendering service. The 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..." Similarly, in K. DAMODARASWAMY NAIDU & BROS vs. STATE OF T.N. (2000) 1 SCC 521, the Apex Court recognized the service tax aspect of the transaction involving supply of food and drink in a restaurant with the following observations: "...The provisions of sub-clause (f) of clause (29A) of Article 366 need to be analysed. Sub-clause (f) permits the States to impose a tax on the supply of food and drink. The supply can be by way of a service or as part of a service or it can be in any other manner whatsoever... 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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