Case Law Details
Sasan Power Limited Vs Commissioner (CESTAT Delhi)
No Service Tax on Agreement with government for supply of water on the basis of volume of water drawn as same is not a case of assignment of right to use natural resources of the government.
e case of Sasan Power Limited vs. Commissioner (CESTAT Delhi) revolves around whether service tax is applicable to an agreement between Sasan Power Limited (the appellant) and the Water Resources Department of the Government of Madhya Pradesh for the supply of water. Here’s a breakdown of the key points and the decision:
Background: Sasan Power Limited entered into an agreement with the Water Resources Department of the Government of Madhya Pradesh to draw water from the Rihand Reservoir for use in its power plant. The agreement involved the payment of water charges by Sasan Power Limited to the government.
Contention: Sasan Power Limited argued that the water charges were not subject to service tax as they were in the form of water tax and cess collected by the Water Department. They also contended that the agreement was for the supply of water, not for the assignment of the right to use natural resources.
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