Case Law Details
Case Name : Cine max India Limited Vs Union Of India & Anr. (Gujarat High Court)
Related Assessment Year :
Courts :
All High Courts Gujarat High Court
Cine max India Limited Vs Union Of India & Anr. (Gujarat High Court)- While upholding Sec.65[105][zzzz] of Finance Act, 1994 as amended by Sec.75[5][h] and Sec.76 of the Finance Act, 2010, we hold that the provision of Sec. 65[105][zzzz] introducing service tax is not attracted if
[i] the vacant land is used solely for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes;
[ii] it is a vacant land, whether or not having facilities clearly incidental to the use of such vacant land;
[iii] land is used for educational, sports, circus, entertainment and parking purp...
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According to a simple reading of the reported judgment, and based on one’s understanding, the contrary view taken by the Delhi HC may have been largely accepted as a better view; of course, as per the law as it stood at that point in time. However, the supervening fact is that the Gujarat HC has since handed out an opposite view, having regard to the law as lastly amended in year 2010. According to a view canvassed in certain quarters, the said retroactive amendment of the law goes to make all the difference. But then the basic issue that seemingly remains to be settled, though with a changed and different complexion, is this: Whether or not the referred amendment of the law by itself is ultra vires the Constitution. To put it differently, – is it at all within the legislative competence to enlarge the very concept of ‘service’, so as impose the so called ‘service tax’ on an item such as pure and simple ‘rent’, involving no element of ‘service’. As such, one will have to wait for knowing what the apex court has to ultimately hold.
Meanwhile, points such as the following deserve an insightful study:
On the first blush, in one’s perception, the arguments of both sides seem to have been primarily confined to / mainly focused on the question whether or not it was, having regard to the overriding constraint in the Constitution, within the power of the Central Government to levy ‘service tax’ on rent from immovable property/land and building. In other words, arguments on the crucial question whether, and why a pure and simple letting out of ‘the property’, which entails/or includes no element of ‘service’ within its ordinary, as well as its strict legal connotation (de hors any ‘deeming’), so as to be justifiably regarded as ‘service’ and be subjected to tax on that premise does not seem to have been sufficiently stressed, as warranted. Should that be so, or even otherwise, perhaps, this is an aspect on which the ‘experts’ active in the field would be obliged to apply their mind, after a close study of the thus far decided court cases, and come out with ideas on the scope left, if any, for pursuing the ongoing battle against such or similar levy. For this purpose, it might be worth examining the specific provisions of the Income-tax Act, as also the line of court decisions, on a related issue, howsoever remote that be. That is, – whether or not income from pure and simple letting out of ‘property’, for a rent, has the characteristics of ‘business’ so as to be taxed as ‘business income’ , or as income under other heads – ‘house property’ or ‘other sources’.
One may usefully read the articles,etc.,@:
>https://taxguru.in/service-tax/service-tax-payable-sale-sim-cards-sales-tax-sales-tax-wrongly-paid-service-tax-payable-supreme-court.html
I need a clarification for the ambit of Sec.65[105][zzzz] where the owner of the commercial flat is an individual and the space is leased to a Company/Firm. What is the liability of the individual owner – in case he is registered under Service Tax or unregistered?