Gir Forest Deputy Conservator Not Liable For Service Tax As Tour Operator, Performed Sovereign Functions: Gujarat HC

The Gujarat High Court has dismissed the Central Excise Department's appeals seeking to recover over ₹3.44 crore in service tax from the office of the Deputy Conservator of Forests over charges collected from tourists visiting Gir Forest, holding that the officer was performing sovereign governmental functions and could not be treated as a tour operator.

“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.”

A bench of Justice A.S. Supehia and Justice Pranav Trivedi said the Deputy Conservator of Forests was facilitating tourist access into the forest as part of official duties, with fees including permit fees, camera fees, and other visitor-related charges being credited directly to the consolidated fund of the State Government.

The dispute arose after the Service Tax Department issued show cause notices for the financial years 2009-10 to June 2017 demanding service tax from the office of the Deputy Conservator of Forests, Gir Forest Division, Junagadh. Orders in original subsequently confirmed the tax demand, interest, and penalties.

The adjudicating authority had concluded that the Deputy Conservator of Forests was engaged in planning, scheduling, organising and arranging tours for visitors entering Gir Forest and Devaliya Park, and therefore fell within the definition of a tour operator. A service tax demand of over Rs. 3.44 crore was raised.

The orders were challenged before the Customs, Excise and Service Tax Appellate Tribunal, which allowed the appeals by relying on an earlier tribunal ruling in Deputy Conservative of Forest v. CCE.

Affirming the tribunal's decision, the High Court held that the charges were collected in discharge of sovereign governmental functions and did not constitute taxable services.

“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.”

The Court also questioned how the department could proceed against a government officer instead of the State Government.

“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.”

Holding that no substantial question of law arose for consideration, the High Court dismissed the appeals filed by the Commissioner of Central Excise and CGST, Bhavnagar.

For Petitioner: Advocate Ankit Shah

For Respondent: AGP Raj Tanna