2017(08)LCX0046

IN THE HIGH COURT OF KERALA AT ERNAKULAM

THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR

ERNAKULAM MERCHANTS ASSOCIATION,
GENERAL SECRETARY

Versus

UNION OF INDIA & OTHERS

WP(C).No. 26370 of 2017 (U) Dated 17.08.2017

Cases Quoted -

...

Advocated By -

PETITIONER(S):SRI.SREEKANTH S.NAIR, SRI.S.JATHIN DAS.
RESPONDENT(S):SRI.N.NAGARESH, SRI.V.K. SHAMSUDHEEN

JUDGMENT

The 1st petitioner is stated to be an association of merchants in Ernakulam represented by its President, and the 2nd petitioner is the General Secretary of the said association. The grievance in the writ petition is essentially that, the petitioners are not treated at par with Tax Returns Preparers, who operate in a scheme of direct taxation, for the purpose of getting remuneration for the service rendered by them in connection with preparing returns. It is the contention of the petitioners that, the non-payment of remuneration to the petitioners for the alleged services that they render to the State Government, in collecting tax amounts from their customers and paying it over to the State Government, amounts to a patent discrimination and, hence, cannot be countenanced. It is significant to note that the petitioners consider the action of payment of tax to the Government, and collection of the said tax from the customers, as a service rendered by the petitioners to the Government, and not as a discharge of the liability of the petitioners to tax in accordance with the statutory

1. I have heard the learned counsel for the petitioners, the learned Government Pleader for the 2nd respondent and the learned Central Government counsel for the 1st respondent.

3. On a consideration of the facts and circumstances of the case and submissions made across the Bar, I am of the view that the petitioners are labouring under a serious misconception with regard to the nature of the scheme of taxation under the Goods and Service Tax Act [hereinafter referred to as the 'GST Act']. The tax that is levied under the GST Act is one that levied on the taxable event of supply of goods or services, and inasmuch as the petitioners are admittedly an association of assessees engaged in either sale of goods or supply of service, the principal liability to tax under the GST Act is that of the petitioners. No doubt, there may be enabling provisions  under the GST Act which enable the petitioners/assessees, to collect the tax so paid from the end consumer. The said enabling provision, however, cannot be confused with the service rendered by a tax return preparers under a scheme of direct taxation, since the enabling provision in an indirect tax legislation, only permits an assessee to pass on the tax paid by him, to the end consumer. The payment of an indirect tax to the Government, by an assessee operating under a scheme of indirect tax, cannot be seen as a service provided to the Government to whom the tax is paid, since the activity of payment of tax is essentially a discharge of a statutory liability by an assessee under the indirect tax system. I, therefore, find that the prayers sought for by the writ petitioner in this writ petition, cannot be granted.           

The writ petition is, therefore, dismissed.

Sd/-
A.K.JAYASANKARAN NAMBIAR
JUDGE

// True Copy // P.A. to Judge

 APPENDIX

PETITIONER'S EXHIBITS:-

EXHIBIT P1                             TRUE COPY OF THE ORDER IN WP (C).NO.505/2015.

EXHIBIT P2                             TRUE COPY OF THE ARGUMENT NOTE SUBMITTED IN PROCEEDING NO. 851/133/2015/TD.

EXHIBIT P3                            TRUE COPY OF GO RT NO. 137/2016/TD DATED 16.02.2016.

RESPONDENT'S EXHIBITS:-             NIL.

//TRUE COPY//
P.S. TO JUDGE