Forest Entry Fees for Sovereign Functions Not Taxable as Tour Operator: Gujarat HC

Commissioner of Central Excise And Central Goods And Services Tax Vs Officer of Deputy Conservator of Forests (Gujarat High Court)

Summary: Gujarat High Court dismissed the Revenue’s appeals challenging the CESTAT order which had set aside service tax demands against the Deputy Conservator of Forests in relation to entry fees, camera fees and other charges collected from visitors to Gir Forest. The Revenue had treated the Deputy Conservator as a “Tour Operator” under Section 65(105)(n) of the Finance Act, 1994 on the premise that the officer was engaged in planning, scheduling, organising or arranging tours by vehicles. The adjudicating authority had also alleged failure to obtain service tax registration under Section 69 read with Rule 4 of the Service Tax Rules, 1994 and quantified service tax of Rs.3,44,77,774/- under Section 73(2) of the Finance Act, 1994 along with interest under Section 75.

The High Court noted that the Deputy Conservator was an officer of the Government of Gujarat entrusted with conservation of Gir Forest and collected permit fees from tourists in his official capacity and at the behest of the State Government. The collections constituted compulsory levies ultimately credited to the Consolidated Fund of the State. The Court held that the respondent was discharging a sovereign governmental function and not any private function capable of being brought within the service tax net. Issuing permits for forest entry, tickets for access to Devaliya Park and collecting camera fees did not constitute taxable services undertaken privately by the respondent.