The Senior Superintendent of Police (Co-ordination) South 24 Parganas District has moved Calcutta High Court challenging the constitutional validity of Imposition of Service Tax on Police activities by Police Authorities.
Justice Debangsu Basak has issued notice and said that, a strong prima facie case has been made out by the petitioners. The Court also directed not to proceed with the show-cause notice any further till disposal of the writ petition.
Additional Advocate General appearing on for the petitioners submitted that, the authorities did not have jurisdiction to impose service tax on police activities undertaken by police authorities. He relied upon an order of the CESTAT reported at 2017 (48) S.T.R. 275 (Deputy Commissioner of Police, Jodhpur vs. Commissioner of Central Excise & Sales Tax, Jaipur-II).
He also relied upon Section 13 of the Police Act, 1961 and submits that, the police is discharging statutory functions in providing police assistance to persons requisitioning the same on chargeable basis. He refers to Regulation 669 of the Police Regulation, Bengal and submitted that, reading the same along with Section 13 of the Act, 1961, it cannot be said that, the police authorities are rendering a service, which is taxable.
The petitioners also stated that, respondent authorities completely misdirected themselves both in facts and in law as the State Government in the Home Department cannot be classified as a person engaged in the business of rendering service relating to the security of any property, whether movable or immovable of any person in any manner including the services of providing security personnel.
The police authorities of the home department, Government of West Bengal are not engaged in any business of rendering services of the nature specified above. The police authorities are sometimes required to provide additional security personnel in against actual cost for maintenance of law and order. The act of providing security personnel on actual cost basis is intrinsically linked with maintenance of law and order. Hence the impugned show-cause notice suffers from want of jurisdiction, the petitioners also stated.
The petitioners also submitted that, For that once it appears from a conjoint reading of Part IX-A and Twelfth Schedule of the Constitution that the charges levied by the petitioner are clearly regulatory in character, then in that event any attempt to levy service tax under Finance Act 1994 on such regulatory charges would be ultra vires the Constitution.
Advocate Abhratosh Majumder, Advocate Soumitra Mukherjee and Advocate Debasish Ghosh also appeared for the petitioners.
The matter posted after seven weeks for hearing.
Read the full text of the Petition below.
