ST – Unless a different intention appears from the terms of contract, in case of the imposition or increase in the tax after the making of a contract, the party shall be entitled to be paid such tax or such increase

Pearey Lal Bhawan Association Vs M/S Satya Developers Pvt. Ltd. (Delhi High Court)

Service Tax: whether the burden of service tax, levied on the service or facility of leasing (of the suit premises) should be borne by the lessor (i.e. the service provider) or the lessee (i.e. the defendant, user). – that unless a different intention appears from the terms of the contract, in case of the imposition or increase in the tax after the making of a contract, the party shall be entitled to be paid such tax or such increase. Although there is no explicit provision to that effect, enabling lessors such as the plaintiff, to the service tax component, this Court is of the view that there is sufficient internal indication in the Act, through Section 83 read with Section 12-A and Section 12-B suggesting that the levy is an indirect tax, which can be collected from the user (in this case, the lessee). This issue, is therefore, answered in the plaintiff’s favor, and against the defendant.

 IN THE HIGH COURT OF DELHI

Pearey Lal Bhawan Association Vs M/S Satya Developers Pvt Ltd

CS (OS) 1016/2008 & IA No. 6532/2008

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