JUDGMENT
C.N. Ramachandran Nair, J.
1. The common petitioner in these three cases is engaged in supply of food and beverage to Air Companies for in flight service to passengers. Exhibit P4 under challenge in W.P.(C) No. 8238/2005 is issued by the Central Excise Department holding that petitioner is liable to get registered and pay service tax under Sections 65 & 66 of the Finance Act, 1994 as amended by Finance (No. 2) Act, 2004 with effect from 10-9-2004, which among other things provides for service tax for the service rendered by outdoor caterers.
2. I heard Sri. P. Gopalakrishnan Nair, counsel appearing on behalf of the petitioner and Sri. John Varghese, Assistant Solicitor General of India, appearing for respondents.
3. ‘Service Tax’ was introduced on outdoor caterers by Finance (No. 2) Act of 2004 with effect from 10-9-2004. Since petitioner is engaged in supply of food and beverages to Air Companies for service to passengers on board flights the Central Excise Department demanded service tax from the petitioner. Petitioner is challenging the impugned notices on the ground that the petitioner is not liable to pay service tax. It is to be noted that there is no challenge against the constitutional validity of the provisions of law authorising levy of service tax on outdoor caterers, probably the petitioner has not chosen to challenge the constitutional validity because in the decision in Tamil Nadu Kalyana Mandapam Assn. v. Union of India reported in 2004 (167) ELT (SC), the Supreme Court has upheld the constitutional validity of the statutory provisions authorising “Service Tax” tax on Mandap keepers and Outdoor Caterers. Therefore, the short question to be considered in these cases is whether the impugned orders directing registration and demanding service tax for service rendered by the petitioner is tenable or not.
4. Since the claim of the petitioner has to be considered with reference to the statutory provisions, reference has to be first made to the definition clauses contained in Section 65 of the Finance Act 1994 as amended. The relevant clauses are extracted herein-below:
65(24). “caterer” means any person who supplies, either directly or indirectly, any food, edible preparations, alcoholic or non-alcoholic beverages or crockery and similar articles or accoutrements for any purpose or occasion”.
“65(76A). “outdoor caterer” means a caterer engaged in providing services in connection with catering at a place other than his own (but including a place provided by way of tenancy or otherwise by the person receiving such services).
5. Petitioner is admittedly engaged in supply of food and beverages to Air Crafts for service to the passengers on board. Counsel for petitioner submitted that supply of food and beverages will attract liability for service tax only when such supplies are made at a place other than normal business premises of the party and such supplies should be for a specific purpose or occasion. According to the counsel, transactions that attract service tax are supplies outside for any purpose or occasion like marriage, birth-day etc. The petitioner’s case is that petitioner’s supply of food and beverages are on regular basis and petitioner’s is not a case of supply for any specific purpose or occasion. I am unable to accept this contention because the “purpose” or “occasion” referred to in the definition clause extracted above, refers to the customer. In other words, supply or service is to meet any purpose of the customer or for any occasion arising to the customer. There is nothing to indicate in the definition clause that such “purpose” or “occasion” should be rare or occasional and should not be frequent or even regular. Service of food and beverages to passengers during flight is the purpose for which Air Companies take the supplies from the petitioner. Petitioner admittedly supplies the items on Board Flights. So much so the activity of the petitioner squarely falls within the definition clause contained in Section 65(76A) read with Section 65(24). Therefore, regular supply of food and beverages by the petitioner to Air Crafts under orders from Air Companies attract liability to tax. Counsel for petitioner also contended that the definition “outdoor caterer” does not cover those who render service in an Air Craft, as the same cannot be called a “place” other than that of the service providers’. No doubt, the outdoor caterers supply foods and beverages in accordance with the terms of supply to the Air Companies. It may be in Airports or on Air Crafts or any other place. So long as the supply is not in the premises of the caterer, it is “outdoor catering”. I do not think, “place” referred to in Section 65(76A) has any artificial or technical meaning. Therefore, service anywhere outside the caterer’s place will attract liability under Section 66 of the Act. Even though counsel for petitioner referring to some earlier decisions of the Supreme Court, contended that levy is harsh and is virtual sales tax for which central legislation is not permissible as the subject is covered by Entry 54 of the State List in the VIIth Schedule to the Constitution, the argument is not tenable by virtue of the direct decision of the Supreme Court above referred in the same matter. I do not think there is any scope for the High Court to entertain the challenge against legislation, after the issue is decided by the Supreme Court. Moreover, pursuant to the decisions of the Supreme Court in Northern India Caterer’s case reported in 45 STC 212 and the decision reported in 29 STC 475 where in supply of food by Hotliers was declared essentially a service, the Constitution was amended by incorporating Clause (f) in Article 366 (29A) authorising levy of sales tax on supply of any goods as part of service. Even though there is sale of goods involved in supply of food and beverages and sale tax is leviable on the same by virtue of Section 2(29) of the KGST Act introduced after constitutional amendment, it is essentially a contract of service as held by the Supreme Court in the above decisions. Therefore, payment of sales tax treating the transaction partly as sale of goods does not exonerate the petitioner from liability for service tax under Central legislation which is upheld by the Supreme Court. Since service of food and beverages by the caterers to Air Craft amounts to sale of goods as well as rendering of service, both service tax and sales tax under the impugned provisions can be levied on the very same transaction.
6. The Additional Solicitor General of India has brought to the notice of this Court Notification No. 20/2004-ST(F.No. B2/8/2004-TRU) dated 10-9-2004 issued by the Central Government under Section 93(1) of the Finance Act 1994 wherein exemption is seen granted on service tax at 50% of the value of service rendered by the outdoor caterers. So much so, the grievance of the petitioner that value of goods, get taxed both for sales tax and for service tax, is not correct. Probably, in the estimate of the Government 50% of the charges is attributable to supply of goods eligible for exemption and balance charges collected is attributable to essentially service rendered by the outdoor caterer. In the circumstances, and in view of the judgment of the Supreme Court above referred I find no scope for interference. It is also reported by the Additional Solicitor General that all other outdoor caterers supplying food to Air Crafts are registered and are paying tax without dispute. Strangely, petitioner has also started remitting tax after taking registration in Tamil Nadu though later made representation claiming exemption in Tamil Nadu and Kerala. Writ Petitions are therefore devoid of any merit and are dismissed. No costs.