C A Koduri Jitendra Babu
Case Citation- Sodexo Svc India Pvt. Ltd. Vs. State Of
Maharashtra And Ors. (Supreme Court), Civil Appeal Nos. 4385-4386 of 2015,
Dated: December 9, 2015
In
the case of Sodexo SVC India Private Limited. Vs The State of Maharashtra
and Others, Bombay High Court has held that Sodexo meal vouchers are utility
goods- Octroi & LBT can be levied on the same. Sodexo has
preferred an appeal against the verdict in Supreme Court and Hon ‘ble
Supreme Court has held that Sodexo Vouchers are
not goods and therefore not liable for Octroi or LBT under Section
2(25) of the Maharashtra Municipal Corporation Act, by setting aside the
judgement of the Bombay High Court. The Supreme Court held as under:
16)
………….The intrinsic and essential character of the entire transaction is to
provide services by the appellant and this is achieved through the means of
said vouchers. Goods belong to the affiliates which are sold by them to the
customers’ employees on the basis of vouchers given by the customers to its
employees. It is these affiliates who are getting the money for those goods and
not the appellant, who only gets service charges for the services rendered, both
to the customers as well as the affiliates.
17)
It is to be borne in mind that the vouchers are not ‘sold’ by the appellant to
its customers, as wrongly perceived by the High Court, and this fundamental
mistake in understanding the whole scheme of arrangement has led to wrong
conclusion by the High Court. The High Court has also wrongly observed that
vouchers are capable of being sold by the appellant after they are brought into
the limits of the city. These vouchers are printed for a particular customer,
which are used by the said customer for distribution to its employees and these
vouchers are not transferrable at all.
18)
As already pointed out above, without the sanction/ authorisation of the RBI to
operate such a payment system under the Payment and Settlement Systems Act,
2007, nobody can operate such a system, as the purpose of the said Act is to
regulate the payment and settlement thereof by means of ‘ Paper Based Vouchers
‘. An insight into the Policy Guidelines dated March 28, 2014 issued by the RBI
to regulate such transactions would also clinchingly bears out that the real
nature of the transaction is to provide service and by no stretch of
imagination these vouchers can be termed as ‘ goods ‘.
24)
We may mention here that the appropriate test would be as to whether such
vouchers can be traded and sold separately. The answer is in the negative.
Therefore, this test of ascertaining the same to be ‘goods’ is not satisfied.
26)
Thus, the value of such free food and non-alcoholic beverage provided by an
employer to an employee is treated as expenditure incurred by the employer and
amenity in the hands of the employee. It is this perquisite given by the
customer to its employees by adopting the methodology of vouchers and for its
proper implementation, services of the appellant are utilised .
27)
For all the aforesaid reasons, we are of the opinion that the judgment of the
High Court has not discussed and decided the issue correctly and warrants interference.
We, thus, allow these appeals and set aside the judgment of the High Court by
holding that Sodexo Meal Vouchers are not ‘ goods ‘ within the meaning of
Section 2(25) of the
Act and, therefore, not liable for either Octroi or LBT .
Act and, therefore, not liable for either Octroi or LBT .
The
Judgement has come as a major relief to the trade and industry, thereby
stalling the revenue authorities from assuming that everything is a good and
liable for taxes.
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