The main legal point established in the judgment is that the liability to pay service tax is of the service receiver, as determined by the amendments made by the Finance Act of 2000.

Deepak Gupta, J.

All these four petitions are being disposed of by a common judgment since they involve identical questions of law and fact.

2. The undisputed facts are that the petitioners herein entered into contracts with the Food Corporation of India (FCI) which is admittedly a Government Corporation for transportation of food grains, sugars and other food materials.

3. Briefly stated the case of the petitioner is that the liability to pay service tax on the services provided by the petitioners of providing goods transport services etc. lies upon the assessee which is the service receiver and not the service provider and, therefore, the FCI has wrongly deducted the service tax from the contractual amount and the same should be ordered to be refunded to the petitioners.

4. The stand of the FCI is that in terms of the agreement entered into between the parties, the contractor has undertaken to pay these liabilities and under the contract entered into between the parties, the contractor has quoted a rate inclusive of all taxes which will include service tax also and therefore, the deduction of service tax has rightly been made from the contractual amount.

5. Lengthy arguments were addressed on the question as to who is the assessee in the given case. In our view, this question should not detain us for long because in view of the amendment to the Service Tax Act made by the Finance Act of 2000 in relation to service providers and their agents providing goods transport services, the assessee is now the service receiver and this amendment is effective from 1997. Therefore, there can be no manner of doubt that the assessee for all intention and purposes would be the Food Corporation of India.

6. We may only refer to the following observations of the Apex Court in Gujrat Ambuja Cement Vs. Union of India, (2005) 4 SCC 214 which read as follows :

“20. As we read the decision in Laghu Udhyog Bharati, the basis was the patent conflict between Sections 65, 66 , 68 (1) and 71 of the Finance Act, 1994 as amended in 1997 on the one hand and Rules 2(1) (d) (xii) and (xvii) of the Service Tax Rules 1994 on the other. Each of these sections of the Finance Act 1994 as amended in 1997 proceeded on the basis that the tax was imposable on the person providing the service. All the other sections regarding the liability to furnish returns, assessments, penalties etc. flowed from that. It was because unamended Section 66 spoke of the liability to pay tax in respect of services "which are provided to any person by the person responsible for collecting the service tax" and Section 65(5) defined "assessee" as meaning "a person responsible for collecting the service tax", that this Court held that sub-clauses (xii) and (xvii) of Rule 2(1) (d) of the Service Tax Rules were illegal.

21. As is apparent from Section 116 of the Finance Act, 2000, all the material portions of the two sections which were found to be incompatible with the Service Tax Rules were themselves amended so that now in the body of the Act by virtue of the amendment to the word "assessee" in Section 65(5) and the amendment to Section 66(3), the liability to pay the tax is not on the person providing the taxable service but, as far as the service provided by clearing and forwarding agents and goods transport operators are concerned, on the person who pays for the services. As far as Section 68(1A) is concerned by virtue of the proviso added in 2003, the persons availing of the services of goods transport operators or clearing and forwarding agents have explicitly been made liable to pay the service tax.

22. As we have said, Rule 2(1)(d) (xii) and (xvii) had been held to be illegal in Laghu Udhyog Bharati only because the charging provisions of the Act provided otherwise. Now that the charging section itself has been amended so as to make the provisions of the Act and the Rules compatible, the criticism of the earlier law upheld by this Court can no longer be availed of. There is thus no q