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2010 DIGILAW 284 (JK)

Alba Power Pvt. Ltd. v. State

2010-05-14

MOHAMMAD YAQOOB MIR

body2010
1. Communication No. 143-STC/315 dated 29.6.2001 is sought to be quashed. In terms of said communication Executive Engineer, Electric Division, Sopore has been informed that rebuilt of damaged transformer is a service thus attracts service tax which is to be deducted from the payments made for the said service at source. 2. Learned counsel for the petitioner would contend that the rebuilt of damaged transformer is not a service so does not attract service tax. It is in that backdrop Executive Engineer had sought clarification from the Commissioner Sales Tax, J&K Government Srinagar. 3. In terms of Section 25(a) of the J&K General Sales Tax Act, Commissioner has power to issue instructions consistent with the provisions of the Act or the rules made there-under as he may consider necessary for the purpose of implementing the provisions of the Act and the rules made there-under. Furthermore in terms of Section 25(c) of the said Act, the Commissioner has also power to determine the issue as may arise otherwise than in the proceedings pending before a Court or before Assessing Authority under Section 7 of the Act for the purposes as detailed in the said section but while determining the issue, the Commissioner has also to hear the objector and also to make such enquiry as he may deem necessary to decide the issue. 4. The power of the Commissioner in view of the said provisions is not open to question but the impugned communication has not been issued by the Commissioner, instead has been issued by P.A (Tech) to Commissioner Sales Tax though he has mentioned that he has been directed to inform but when a clarification is sought or an issue is to be determined, it is the Commissioner who has to apply the mind and to adhere to the provisions of Sales Tax Act and then to issue such instructions or then to determine the issue which may include determination of service warranting levying of service tax. The impugned communication is reproduced here-under: Office of the Commissioner Sales Tax, J&K Government, Srinagar No.143-STC/315 Dated 29.6.2001 The Executive Engineer, Electric Division, Sopore. Subject: Clarification with regard to application of service tax to M/S Alba Power Pvt. Ltd. and M/S Jhelum Electricals. Reference: Your letter No. 1244-46 dated 19.6.2001. The impugned communication is reproduced here-under: Office of the Commissioner Sales Tax, J&K Government, Srinagar No.143-STC/315 Dated 29.6.2001 The Executive Engineer, Electric Division, Sopore. Subject: Clarification with regard to application of service tax to M/S Alba Power Pvt. Ltd. and M/S Jhelum Electricals. Reference: Your letter No. 1244-46 dated 19.6.2001. Sir, In this connection, I am directed to inform that rebuilt of damaged transformer is a service thus attracts service tax which is to be deducted from the payments made for the said services at source. It is further clarified that the service tax has been levied w.e.f. 23.7.1997 vide SRO No.257 dated 23.7.1997 at the rate of 2% plus surcharge. Subsequently the rate of tax has been increased to 4% plus surcharge w.e.f. 1.4.1999 to 31.12.2000. From 1.4.2001 the Small Scale Industries Units other than those falling in the Negative list are exempt from payment of service tax. Yours faithfully, Sd/- (P.A. Tech) to Commissioner Sales Tax, J&K Government, Sgr. 5. It is quite clear that the communication has been issued by an incompetent person i.e. PA though shown to have been issued on the directions but same is not permissible. An important issue cannot be dealt with the way it has been dealt with. The said communication, therefore, does not survive the test of legality, as such, is held to be illegal, so is quashed. 6. Commissioner Sales Tax, J&K Government Srinagar shall be at liberty to consider the matter afresh and in the process shall also, if he so chooses, hear the petitioner and thereafter issue the clarification as has been sought by the Executive Engineer, Electric Division, Sopore vis-a-vis questions of service tax relatable to the rebuilt of damaged transformer. 7. Petition accordingly succeeds and is disposed of aforesaid terms.