SODEXO SVC INDIAPRIVATE LIMITED versus STATE OF MAHARASHTRA & ORS.

Citation: [2015] 13 S.C.R. 1232 · Decided: 09-12-2015 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
[2015] 13 S.C.R.1232 
SODEXO SVC INDIAPRIVATE LIMITED 
v. 
STATE OF MAHARASHTRA& ORS. 
(Civil Appeal Nos. 4385-4386 of 2015) 
DECEMBER 09, 2015 
[A. K. SIKRI AND R. F. NARIMAN, JJ.] 
Maharashtra Municipal Corporation Act, 1949: ss.2(25), 
c 2(31A), 2(42) - Octroi or Local Body Tax- Imposition of, on 
Meal Vouchers- In the instant case, paper based vouchers 
printed by appellant and sold to its customers, who in turn 
provide these vouchers to their employees for utilizing in the 
restaurants or different places or outlets to get ready-to-eat 
D items and beverages of the face value printed on these 
vouchers - Whether these vouchers can be treated as goods 
for the purpose of levy of Octroi or Local Body Tax or the 
said activity only amounts to rendering service by the 
appellant- Held: In this case, the arrangement is made by 
E the appellant with the affiliates for supply of goods against 
the vouchers -
This arrangement is made to help the 
customers by simply facilitating the provision for making 
available food items etc of particular amount represented by 
vouchers to the employees of these customers -
Thus, 
F appellant is only a facilitator and a medium between the 
affiliates and customers and is providing these services -
These Meal Vouchers cannot be treated as 'goods' for the 
purpose of levy of Octroi or LBT - Payment and Settlement 
Systems Act, 2007 - Tax/Taxation - Local Body Tax. 
G 
Allowing the appeals, the Court 
HELD : 1. These vouchers are not the commodity 
which are sold. If the face value of the said vouchers is 
H 
~50, by giving these vouchers to its customers, the 
1232 
SODEXO SVC INDIA PRIVATE LIMITED v. STATE OF 
1233 
MAHARASHTRA & ORS. 
appellant only takes specified service charges from its A 
customers, which is normally ~ 2 for ~ 50 voucher. 
Likewise, when these vouchers are given by the 
customers to its employees and the employees present 
the same to various affiliates with whom the appellant 
had made the arrangements and those affiliates supply B 
the goods against those vouchers, while reimbursing 
the cost of these vouchers to the said affiliates, the 
appellant again takes service charges from these 
affiliates, which is again a sum of~ 2. Thus, if1sofar as 
the appellant is concerned, it has made the arrangements C 
with the affiliates for supply of goods against those 
vouchers. This arrangement is made to help the 
customers by simply facilitating the provision for making 
available food items, etc. of a particular amount, D 
represented by vouchers, to the employees of these 
customers. No doubt, vouchers bear a particular value 
and for such value, goods are provided to the 
employees. However, these goods are not provided by 
the appellant, but by the affiliates. The appellant is only E 
a facilitator and a medium between the affiliates and 
customers and is providing these services. 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 F 
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, G 
both to the customers as well as the affiliates. [Para 16] 
[1244-H; 1245-A-F] 
2. The vouchers are not 'sold' by the appellant to · 
its customers, as wrongly perceived by the High Court, H 
1234 
SUPREME COURT REPORTS 
(2015] 13 S.C.R. 
A 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. 
B These vouchers are printed for a particular customer, 
which are used by the said cµstomer for distribution to 
its employees and these vouchers are not transferrable 
at all. [Para 17) [1245-G-H; 1246-A] 
C 
3. 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 
D Based Vouchers'. An insight into the Policy Guidelines 
dated March 28, 2014 issued by the RBI to regulate such 
transactio.ns woul

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