HIGH COURT OF MADRAS
Commissioner, Salem Municipal Corpn.
Versus
Commissioner of Central Excise
WRIT PETITION NO. 32176 OF 2012
M.P. Nos. 1 & 2 of 2012
MARCH 5, 2013
ORDER
1. The Order-in-Original passed by the Commissioner of Central Excise in C.No.No.V/RIP/15/18/2011-ST.ADJ/Order Sl.No.03/2012 (ST), dated 21.8.2012 has been called in question in this writ petition, seeking to quash the same.
2. The petitioner-Salem Municipal Corporation is a statutory body and owns number of properties both movable and immovable, vacant land, markets, chandais, etc. and it has leased or given on license the properties on monthly or annual basis for one year or for three years by tender-cum-public auction and the same will be renewed as per the prevailing Government Orders and the lease amount or license fee would be paid to the Corporation. While so, Service Tax was introduced on renting of immovable property service with effect from 01.6.2007 by the amendment of Finance Act, 1994 by Finance Act, 2007. Further by the amendment in the year 2010, certain other immovable properties were also included for payment of service tax with effect from 01.06.2007. The respondent informed the petitioner by his letters dated 01.6.2010 and 18.6.2010 that renting of immovable property service had become a taxable service with effect from 01.6.2007 and service tax has to be paid at the appropriate rate on the gross amount received for rendering such service. On such intimation, the petitioner took earnest efforts to collect service tax from the lessees/licencees. Since the new tax was extended to the service with retrospective effect and three years had lapsed from 01.06.2007, the petitioner found it very difficult to collect the service tax from the lessees/licencees. However, the petitioner collected the service tax for both the earlier period and for the current period and paid it to the respondent a total amount of Rs. 48,34,431/- as detailed below:
