The Superintendent Of Police vs. The Union Of INDIA

Facts

The petitioner, the Superintendent of Police, Tirunelveli District, filed a writ petition challenging an Order-in-Appeal. This appeal upheld an Order-in-Original that sought to levy service tax on the petitioner for deploying its staff to banks and private financial institutions for cash transportation to ATM centers. The petitioner argued that these activities were sovereign functions and thus outside the purview of service tax. The revenue contended that the writ petition should be dismissed due to the availability of an alternate remedy. The dispute concerns the leviability of service tax on services provided as part of the sovereign functions of the Government of Tamil Nadu.

Held

The Court acknowledged that the issue appeared to be covered in favor of the petitioner based on the cited tribunal decisions and the circular. However, it refrained from allowing the writ petition directly due to the existence of an alternate statutory remedy. The Court noted that finer aspects of law should ideally be decided in a statutory appeal. Therefore, the Court disposed of the writ petition by granting the petitioner liberty to file a statutory appeal before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai, within 60 days. The CESTAT was directed to entertain the appeal and dispose of it on merits, considering the cited decisions, expeditiously.

Key Issues

1. Whether the activities of deploying police personnel for cash transportation to banks and private financial institutions, for which charges are collected, constitute a taxable service under Section 65(105)(w) of the Finance Act, 1994, or are they sovereign functions exempt from service tax? The petitioner argued that the activities are sovereign functions performed under statutory obligations, citing Circular No. 89/7/2006-S.T. dated 18.12.2006, which clarifies that statutory activities performed by sovereign/public authorities are not taxable services. They also relied on several CESTAT decisions, including Deputy Commissioner of Police, Jodhpur Vs. CCE & ST, Jaipur-II, and Mumbai Police Vs. CST, which supported their position. The petitioner contended that the impugned order is liable to be set aside based on these precedents. The respondents (revenue) argued that the writ petition should be dismissed because the petitioner has an alternate remedy.