Thursday, September 22 2005 17:37 Hrs (IST) - World Time -

Madurai: A Public Interest Litigation (PIL) seeking to prevent the BSNL from collecting the Service Tax (ST) from its customers was today (Sept 22, 2005) admitted by the Madurai Bench of the Madras High Court.

A division bench comprising Justice P Sathasivam and Justice Sardhar Zakria Hussain admitting the PIL issued notice to Union Telecommunication and Information Technology Secretary and General Manager of the BSNL here.

Petitioners, S V Pathy, Secretary, All-India Tax Payers Welfare Association, and Kana.Muniyasamy, General Secretary, Madurai Consumer protection Centre, also sought an interim injunction preventing the BSNL from collecting the tax till he disposal of their petition.

They submitted that the latest provision of the Finance Act 2005 and Sec 2 of Service Tax rules 1994 clearly stated that the person or the firm that rendered taxable service had to pay ST at the rate fixed from time to time.

But the BSNL had shifted the burden of liability of paying tax to customers or the consumers and the Union Government was not bothered about the consequences of shifting the burden ST payment on consumers, they contended.

The Supreme Court also had held there was no ambiguity that the service provider and not the consumer had to bear the burden of paying the ST, they said.

The petitioners submitted that departments throughout the country were collecting the ST from the customers ever since it was introduced which was not in accordance with the provisions of Secs 65,66 and 68 (all amendments to the Finance Act 1994).

The collection of ST from customers was improper, illegal and contrary to the principle of natural justice. Several representations made through letters and resolutions did not evoke any response from the Centre, they said.