Commissioner of Central Excise And Central Goods And Services Tax Vs Office of The Deputy Conservator of Forests (Gujarat High Court)
Summary: The Gujarat High Court dismissed the Revenue’s Tax Appeal No. 510 of 2025 concerning service tax sought to be levied on charges collected by the Office of the Deputy Conservator of Forests in respect of activities connected with visitors to Gir Forest and Devaliya Park. The appeal arose from Final Order No. 12202 to 12204 of 2004 dated 26.09.2024 passed by the Customs, Excise & Service Tax Appellate Tribunal, Regional Bench, Ahmedabad, in Service Tax Appeal No. 11955 of 2018 and allied matters. The Revenue had earlier preferred Tax Appeal Nos. 505 and 506 of 2025 against the CESTAT order, and the Coordinate Bench had dismissed those appeals.
The Court recorded that the Deputy Conservator of Forests is an officer of the Government of Gujarat entrusted with conservation of Gir Forest and that charges in the nature of permit fees were collected in his official capacity, at the behest of the State Government, with the amounts ultimately credited to the Consolidated Fund of the State. The original adjudicating authority had nevertheless treated the respondent as a “Tour Operator” under Section 65(105)(n) of the Finance Act, 1994 and had held that Entry Fees, Camera Fees and other charges collected from visitors constituted taxable consideration. Service tax of Rs. 3,44,77,774/- was consequently demanded under Section 73(2), with interest under Section 75 and penalty under Section 77(1)(a).
The CESTAT, however, had allowed the appeals by relying upon Tour Operator jurisprudence, including the decision reported at 2019 (20) GSTL 355 (T), holding that amounts recovered by a Forest Department for entry permits and vehicles and credited to the State Treasury constituted fees or amounts collected under the relevant statute for performance of statutory functions and could not be treated as consideration for organising tours. The High Court agreed that the Deputy Conservator was discharging a sovereign governmental function rather than carrying on a private commercial activity. It further noted Article 246(3) of the Constitution and held that the statutory charges collected by the State Government in discharge of its forest-conservation functions could not be brought within the service-tax levy in the manner attempted by the Revenue.
The Court also observed that the activities of issuing permits for entry into forests, issuing tickets for access to Devaliya Park and collecting Camera Fees did not constitute taxable services when performed as part of the officer’s official duties. The Court concluded that the Revenue had wrongly impleaded the Deputy Conservator of Forests and that, even assuming a legally sustainable case existed, it would lie against the Government of Gujarat rather than the individual officer acting in his official capacity. Since the issue had already been decided by the Coordinate Bench in Tax Appeal No. 505 of 2025 and the allied appeal, the Court held that no question of law, much less a substantial question of law, arose for consideration and dismissed the present appeal.
Cases Discussed
- Commissioner of Central Excise and Central Goods & Services Tax, Bhavnagar Vs Office of the Deputy Conservator of Forests, Tax Appeal No. 505 of 2025 and allied appeal, Gujarat High Court.
- Deputy Conservator of Forest and Deputy Field Director Vs Commissioner of Central Excise, reported in 2019 (20) GSTL 355 (T).
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Heard learned advocate Mr.Parth Mehta appearing for learned Senior Standing Counsel Mr.Ankit Shah for the appellant and Ms.Shrunjal Shah learned Assistant Government Pleader for the respondent – State.
2. The present tax appeal emanates from Final Order No. 12202 to 12204 of 2004 dated 26.09.2024 passed by the Customs, Excise & Service Tax Appellate Tribunal (for short ‘the CESTAT’), Regional Bench, Ahmedabad, in Service Tax Appeal No. 11955 of 2018 and allied matters.
3. The appellant – Revenue had preferred Tax Appeal No. 505 of 2025 and 506 of 2025 against Final Order No. A/12204/2024 dated 26.09.2024, which was dismissed by Co-ordinate Bench of this Court by observing as under:
“2 It is interesting to note that the appeals are preferred by the Commissioner of Central Excise and Central Goods & Services Tax, Bhavnagar against the office of the Deputy Conservator of Forests, Gir Forest, Sinh Sadan, Sasan, Junagadh Thus, the Commissioner of Central Excise authority is aggrieved by the action of the respondent- Deputy Conservator of Forests, who is the person in charge of wild life division in the district of Junagadh working under the Ministry of Forests and Environment, State of Gujarat.
3 We fail to understand that how an officer of the State Government – Deputy Conservator of Forests is roped in the proceedings who would not fall under the definition of “Tour Operator” or under Section 65(105) (n) and 65(105) (zzzzw) and 65(105)(n) as per the Finance Act, 1994 (for short the Act, 1994′), substituted by the Finance Act, 2008 with effect from 16.05.2008. The appellant has encompassed the government officer ie Deputy Conservator of Forest within the definition of “Tour Operator” by contending that the he would be the person who satisfies the ingredients of the definition since he is engaged in the business of tour operating and is also planning, rescheduling or arranging the tours by any mode of transport.
4 It is not in dispute that the State Government is the authority which protects the conservation of the forests within its geographical territory and the fees collected by the respondent in its official capacity on behalf of Government of Gujarat and in discharge of his sovereign function is credited directly to the consolidated funds of State of Gujarat. It appears that a Show-Cause Notice for the Financial Year from 2009-10 to June-2017 demanding Service Tax was issued by the appellant on 10.10.2014, 14.03.2016 and 22.03.2018, which was adjudicated upon by the order-in-original dated 06.11.2015, 28.02.2017 and 03.05.2019, confirming the demand of Service Tax along with the interest under Section 75 of the Act, 1994 and thereafter imposed a penalty under Section 77(1)(a) of the Act, 1994.
5. By the Order-in-Original dated 03.05.2019, the Commissioner of Excise and Central Goods & Services Tax held that the respondent- Deputy Conservator of Forest would fall within the category of “Tour Operator” in terms of Section 65(n)(105) of the Finance Act, 1994. It was further held that the respondent had charged from the visitors such as Entry Fees, Camera Fees and other charges for
visiting the forest at Sasan Gır. Hence, it is held that respondent is engaged in the business of planning, scheduling or organizing and arrangement of tours by vehicles, and thus, would be fully covered under the definition of “Tour Operator” By holding thus, it is further held that the respondent has not applied for registration under the appropriate category of the Service Tax at the relevant time and has not obtained Service Tax registration Certificate in the category of “Accommodation in Hotel” and “Tour Operator”. Thus, violated the provision of Section 69 of the Act, 1994 read with Rule 4 of the Service Tax Rules, 1994.
6 Ultimately, the adjudicating authority Commissioner of Excise held the respondent Deputy Conservator of Forests hable for the lecunas and ultimately calculated the service tax of Rs. 3,44,77,774/-, which is hable to be recovered under Section 73(2) of the Act, 1994 along with interest under Section 75 of the Act, 1994.
7 The following Order-in-Originals were challenged before the tribunal ie Service Tax Appeal No. 11413 of 2016 (Order-in-Original dated 06.11.2015), Service Tax Appeal No. 11955 of 2018 (Order-in-Original dated 11.04.2018) and Service Tax Appeal No 12032 of 2019 (Order-in-Original dated 03.05.2019), passed by the appellant. The tribunal vide common Judgment and Order dated 26.09.2024, allowed the Tax Appeals by placing reliance on the Judgment in the case of Deputy Conservative of Forest Vs. CCE reported in 2019(20) GSTL 355 (T).
8. It is not in dispute and it is established from the findings of the tribunal as well as the Order-in-Original that the Deputy Conservator of the Forest is the officer of the Government of Gujarat who is entrusted with the job of conservation of Gir Forest. The duties of collection of charges in the nature of permit fees from various tourists is undertaken by the Deputy Conservator of Forest in his official capacity, and at the behest of the state government. Thus, the respondent Deputy Conservator of Forest was discharging his sovereign function which cannot be brought within the purview of Service Tax and was not discharging any private function by acting as a Deputy Conservator of Forests. It is also not in dispute that the amount collected in his official capacity is a fee in a nature of compulsory levy which is ultimately is credited to the consolidated funds to the Government of Gujarat since the State Government is the authority which protects and conserves the Forests within its geographical territory
9. As per Article 246(3) of the Constitution of India, the State legislatures have exclusive power to make laws with respect to the matters listed in the State List (List II) of the Seventh Schedule and the Government of Gujarat has powers to levy such charges and the Central Government cannot make any law to levy tax from the statutory charges collected by the State Government, more particularly, when it protects and conserves the forests within its geographical territory. It is also not in dispute the levy of Service Tax is sought to be imposed on the income of the State Government, which is not permitted by Constitution of India or any Statutory provisions. The Deputy Conservative Officer of Forest only facilitates the tourists and provides the wherewithal through the Government facilitates such as buses etc. These activities of issuing permits for entry into the forests and issuing tickets for access to Devaliya Park as well as Camera Fees etc, does not fall in any of the categories as taxable service which is undertaken by the respondent in its official duties. Ultimately, these fees which are collected and consolidated fund of the State Government. Hence, we fail to understand how the appellant has assumed its jurisdiction in passing the Order-in-Original in levying the service Tax as well as consequential penalty Thus, right from the inception of proceedings the appellant has wrongly impleaded the respondent- Deputy Conservator of Forest and roped him in the proceedings. Even if it is assumed that the department had any legal or valid case, the same will only lie against the Government of Gujarat and not against the respondent who is the officer of the State of Gujarat and is appointed by the State Government on the post of Deputy Conservator of Forest in his official capacity.
10. Thus, the present appeal is devoid of any merits and misconceived. We do not find any convincing reason to disturb the decisions of the Tribunal. Finally, we may mention the proposed Substantial Question of law which is as under:
“2.1 Whether CESTAT is correct in allowing appeal of the respondent by considering their activities as statutory functions?”
11. Thus, on an overall analysis, we are of the opinion, that no substantial question of law, much less a substantial question of law arises in the present appeals, which calls for deliberation. Hence, the present appeals stands dismissed.”
4. Thus, the order which is impugned in the present matter and the issue involved therein, is already decided by this Court in Tax Appeal No.505 of 2025 and allied appeal.
5. In view of the same, no question of law, much less any substantial question of law arises in the present appeal, which calls for deliberation. Hence, the present appeal stands dismissed.
