Case Law Details
Delhi High Court has again granted stay to Home Solution Retail (I) Ltd. in W.P. (C) No. 3398 of 2010 on 18.05.2010 from payment of service tax on renting of immovable property. The stay is not on services in relation to renting but on renting per se.
Copy of Stay Order can be downloaded from the following Link:-
Download Stay Order in the case of Home Solution Retail (I) Ltd.
Relevant Text of the Decision is as Follows:-
HIGH COURT OF DELHI
Home Solutions Retails Ltd. & Others
Vs
UOI
W. P. (C) 3398/2010
May 18, 2010
FACTS
In this writ petition there is a challenge to section 65(105)(zzzz) of the Finance Act, 1994 inasmuch as it purports to levy service tax on the renting of immovable property to be used for commercial / business purposes. This provision has been recently amended by the Finance Act, 2010 with retrospective effect from 1-6-2007.
HELD
Prima facie renting of immovable property itself has been regarded as a service by virtue of the recent amendment even though this Court by virtue of its decision on 18-4-2009 had categorically concluded that renting of immovable property by itself cannot be regarded as a service.
Issue notice. Notice is accepted by the counsel appearing on behalf of the respondent Nos. 1 and 3 and the counsel appearing on behalf of the respondent Nos. 2 and 4. Notice shall issue to respondent 5- 10.
The respondents shall file the counter-affidavits within four weeks and the petitioner shall file the rejoinder/ affidavits thereto within two weeks thereafter. In the meanwhile, there shall be no recovery of service tax from the petitioner in respect of renting of immovable property alone. No such service tax would also be recovered from respondents 5-10 in the meanwhile.
It is made clear that in the event the writ petition is dismissed, the liability to pay service tax along with any other liability as a result of the demand made, will solely be that of the petitioner. We make it clear that there is no challenge in this writ petition to the second part of the aforesaid provision, namely, “any other service in relation to such renting” and consequently, if there is any other such service, the service provider would be liable to pay service tax on such service and in respect of this portion of the provision there is no stay.
And this Jajia Kar ( forceful taxation) is later shared among politician/burocrat/contractor/in various Plan outlays.
Dear friends,
DELHI HIGH COURT STAY (SERVICE TAX ISSUE)
First para reveals that Issue relates to immovable property which was struck down by Delhi High court on 18.04.2009. How and why Service tax was levied despite court dictum ? Is it some thing other than that under cover of Tangible or In-tangible supply of goods and service which has a very wide scope? Any way what-ever It is like immovable property, movable property renting which includes plant and machinery (Heavy)should also get complete immunity from Service tax net.In some cases like this, It appears that It is like JAJIA KAR ( Imposed by Mugal King Auranjeb).
In larger public interest, It would be in fitness of things and just and proper too to exclude renting of Movable or immovable property from service tax net taken in any form such as tangible or intangible goods service. These small measures will help in curbing and controlling PRICE HIKE and bring a big respite for property owners which are investing in real estate and plant and machinery for industrial and commercial usage. On one hand Govt. allows Depreciation and on other hand collecting service tax which is detrimental to the interest of assessee/investor. All these notifications ought to be rescinded at the soonest for which joint efforts to be made.P M O will surely assist if represented properly by the expert elaborating pros and cons of the issue.
Regards
AK Bhargava, Katni