Bhagwati Security Service vs Union of India and Others

Heard learned counsel for the petitioner and Sri B.K.S Raghuvanshi, learned counsel for the department.

Petitioner, before this Court, seeks quashing of the order of the Assistant General Manager (Administration), Telecom Department, Bharat Sanchar Nigam Ltd., Saharanpur dated 26th February, 2015, wherein the representation made by the petitioner for reimbursement of penalty and interest, which he had deposited with the Service Tax Department as well as for payment of interest on the service tax which has been reimbursed by the Bharat Sanchar Nigam Ltd. in terms of the direction issued by the Writ Court under judgment and order dated 16th January, 2013 passed in Writ Tax No. 870 of 2007 [M/s. Bhagwati Security Services (Regd.) v. Union of India & others) has been rejected. The order impugned has been made on the representation of the petitioner, which was filed with reference to the order of the High Court dated 22nd January, 2015 passed in Writ Tax No. 45 of 2015 filed by the present petitioner.

From the records of the present writ petition, we find that the petitioner had entered into a contract with the Bharat Sanchar Nigam Ltd. for providing security services. On the money received for the services so provided, he was called upon to pay service tax. This liability of service tax was alleged by the petitioner to be reimbursable in terms of the contract entered into between the parties.

The High Court by means of the judgment and order dated 16th January, 2013 held that the statute imposes the tax upon the person to whom service is provided and the service provider is merely a collecting agency. Therefore, the Court directed that amount of service tax paid by the petitioner be reimbursed by the Bharat Sanchar Nigam Ltd.

There is no issue with regard to the reimbursement of the service tax in compliance to the order of the High Court referred to above before us.

So far as the claim of interest and penalty is concerned, it has been recorded under the order impugned that the petitioner himself had committed default in payment of the service tax. It has been noticed that the total amount of the service tax which was collected by the petitioner to the tune of Rs. 2,36,114/- was paid vide cheque dated 9th May, 2013. From the records it is apparent that this service tax was in respect of a period of 10 years earlier. Therefore, default in payment of the service tax resulting in consequential penalty and interest was by the petitioner himself. The findings so recorded by the Assistant General Manager under the order impugned could not be disputed before us.

In view of the aforesaid, we do not find a good ground to interfere with the impugned order of the Assistant General Manager.

The present writ petition is accordingly dismissed.

However, this order shall not prejudice the rights of the petitioner to file a civil suit as may be maintainable and to claim compensation/interest if any, if there has been uncalled for delay in reimbursement of the money by the Bharat Sanchar Nigam Ltd. in terms of the contract between the parties.