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NC: 2023:KHC:33940-DB

WA No. 776 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 20^TH DAY OF SEPTEMBER, 2023

PRESENT

THE HON'BLE MR PRASANNA B. VARALE, CHIEF JUSTICE

AND

THE HON'BLE MR JUSTICE KRISHNA S DIXIT

WRIT APPEAL NO. 776 OF 2023 (GM-RES)

BETWEEN:

1.

THE CHAIRMAN,

LIFE INSURANCE CORPORATION OF INDIA,

YOGAKSHEMA BUILDING,

EAST WING, 3^RD FLOOR,

JEEVANA BHIMA MARGA,

MUMBAI - 400 021.

2.

THE ZONAL MANAGER,

LIFE INSURANCE CORPORATION OF INDIA

JEEVAN BHAGYA,

OPP. SECRETARIAT, SAIFABAD,

HYDERABAD-560 063,

ANDHRA PRADESH.

3.

THE SENIOR DIVISIONAL MANAGER

LIFE INSURANCE CORPORATION OF INDIA,

DIVISIONAL OFFICE, BUNNY MANTAPA ROAD,

MYSURU - 571 015.

…APPELLANTS

(BY SRI. HALLUR SHIVAYOGI BASAVARAJ.,ADVOCATE)

AND:

1.

THE UNION OF INDIA

BY ITS ECONOMIC ADVISER-1,

MINISTRY OF FINANCE,

DEPARTMENT OF FINANCE SERVICE,

Digitally signed

by SHARADA

VANI B

Location: HIGH

COURT OF

KARNATAKA

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WA No. 776 of 2023

ROOM NO. 9 , JEEVAN DEEP BUILDING,

PARLIAMENT STREET, NEW DELHI - 110 001.

2.

THE COMMISSIONER OF INCOME TAX

TAX-1, RANGE, NO.59,

HMT BHAVAN, 4^TH FLOOR,

BELLARY ROAD, GANGANAGAR,

BENGALURU-560 032.

3.

THE SUPERINTENDENT OF SERVICE TAX

RANGE-1, SERVICE TAX DIVISION AND

FAROOUIA BUILDING,

NEW SAYYAJI RAO ROAD,

MYSURU-570 021.

4.

M/S KALE GOWDA ENTERPRISES

NO. 224/11-P1, OMC ROAD,

JKALLAHALLI, MANDYA CITY,

MANDYA,

R/BY ONE OF ITS PARTNER

SRI. K. GURUSWAMY

S/O LATE KALEYGOWDA,

AGED ABOUT 63 YEARS,

R/O OLD M.C. ROAD, KALLAHALLI,

MANDYA CITY, MANDYA - 571 401.

…RESPONDENTS

(BY SMT. ANUPAMA HEGDE.,ADVOCATE FOR R1)

THIS WRIT APPEAL FILED UNDER SECTION 4 OF THE

KARNATAKA HIGH COURT ACT,1961 PRAYING TO 1. SET ASIDE

THE ORDER DATED 18.04.2023 PASSED BY THE LEARNED

SINGLE JUDGE IN W.P. No. 12322/2014 (GM-RES)2. QUASH

THE ENTIRE PRAYER OF THE 4TH RESPONDENT HEREIN AS

PRAYED

FOR

IN

THE

WRIT

PETITION

AGAINST

THE

APPELLANTS AND ETC.,

THIS APPEAL COMING ON FOR PRELIMINARY HEARING,

THIS DAY, CHIEF JUSTICE DELIVERED THE FOLLOWING:

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WA No. 776 of 2023

JUDGMENT

The

unsuccessful

respondents

in

W.P.

No.12322/2014 have preferred this intra-court appeal for

calling in question a learned Single Judge's order dated

18.04.2023 whereby the said writ petition came to be

allowed holding that it is the liability of the appellants

herein to pay the service tax, though they happened to be

the recipient of services and as a corollary, the writ

petitioner who happens to be respondent No.4 herein has

been relieved of the obligation.

2.

Learned

panel

counsel

appearing

for

the

appellants vehemently submits that the liability to pay the

service tax cannot be denied is true; however, on whose

shoulders such liability rests is a matter of contract

between the parties namely, the service provider and the

service recipient; under the arrangement in question, such

an obligation lies with the service provider only. He adds

that all this having been wrongly assessed, the impugned

order is liable to be set at naught. Learned CGC

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WA No. 776 of 2023

appearing

for

the

official

respondents

repels

the

submission of the appellant contending that the learned

Single Judge's views accord with the rulings of the Courts.

3.

Having heard the learned counsel appearing for

the parties and having perused the appeal papers, we

decline interference in this matter broadly being in

agreement with the reasoning of the learned Single Judge

who has structured the impugned order keeping in view

the observations of the Apex Court in UNION OF INDIA

vs

BENGAL

SHRACHI

HOUSING

DEVELOPMENT

LIMITED, (2018) 1 SCC 311, which discusses the

difference between a taxable event and the taxable

person. Service tax is an indirect tax and therefore it can

be passed on by the service provider to the recipient of

service, is true as a