M/S KERALA STATE ELECTRICITY BOARD vs COMMR.OF CENTRAL EXCISE,THIRUVANTHAPURAM

The Supreme Court held that under the Finance Act, 1994, specifically Sections 65, 66, and 68, the liability to pay service tax rests with the service provider, but contractual obligations can shift this responsibility. The Court affirmed the Kerala High Court's ruling that the Kerala State Electricity Board (KSEB) was liable to pay service tax on behalf of the foreign consultancy firm, SNC Lavalin, as per their agreement. The Court clarified that despite statutory obligations, the contractual terms dictated the responsibility for tax payment, thus upholding the High Court's decision.