Case Law Details
Allied Engineers & Builders Pvt. Ltd. Vs Muthoot Finance Limited & Anr. (Delhi High Court)
In our view, the present petition is misconceived. Apparently, Petitioner has not received the entire amount against the monthly rent invoices for the period commencing from November 2012 to June 2020. Petitioner contends that the outstanding amount is towards the tax component levied on the said invoices. In the present case, we have not been called upon to adjudicate as to whether the liability to pay the taxes is on the Petitioner or Respondent No. 1. This question would have to be determined inter-se Petitioner and Respondent No.1, in appropriate proceedings, having regard to the terms and conditions of the lease agreement and in particular the Clause 13, extracted in the foregoing paragraphs. Here, we are only concerned with respect to the prayer made in the present petition seeking a direction to Respondent No. 2 [Principal Chief Commissioner of GST and Central Excise] to furnish the information sought for by the Petitioner. Concededly, as the owner/ landlord of the property in question, Petitioner was required to register itself, and discharge the service tax liability from the date it was covered under the threshold limit applicable to service tax. Likewise, under the CGST Act, 2017, renting of certain immovable properties is treated as taxable services. Here also it is the Petitioner who has the obligation to discharge the GST liability. The service tax/GST paid on the rent can be availed as Input Tax Credit for utilisation against outgoing payments, provided, however, the criteria for availing Input Tax Credit is met. However, the availment of credit of the taxes paid by the Lessee does not affect the liability of the registered taxpayer to pay the taxes. In so far as the tax department is concerned, it is the Petitioner who is registered with them and is liable to pay taxes. Under GST, the point of taxation, that is the liability to pay GST will arise at the time of supply, as determined for goods and services. This obligation to pay Service Tax/GST is irrespective of Respondent No. 1 taking credit of the taxes paid. Thus, in our view whether Respondent No. 1 has availed the credit of Service Tax/GST or not is immaterial and will not effect Petitioner’s right, if any, to recover the same. At the cost of repetition, we reiterate that this right of recovery would have to be determined in the context of the clauses contained in the lease agreement, in appropriate proceedings.
Lastly, we would also like to observe that Learned counsel for the Petitioner is also unable to show any provision of law that puts an obligation on the tax department to furnish the information for which the mandamus is being sought. In case the petitioner has no such legal right, the prayer cannot be granted. We find no merit in the petition and the same is dismissed. Needless to say, the rights and contentions of the parties are left open.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
CM APPL. 12795/2020
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Well drafted order by court. Short and to the point