2015 (4) TMI 1056 - AT - Service Tax

Service Tax on Renting of Immovable Property Service - issuance of show cause notice to wrong partly - Held that - . The Hon ble High Court 2013 (9) TMI 791 - KARNATAKA HIGH COURT has held that the unit to whom the show cause notice was issued cannot be considered as person and since the property is belonging to CSI TA, the proceedings should have been initiated against CSI TA and not against the units. The Hon ble High Court quashed the Order-in-Original passed by the Commissioner is quashed. - In view of above discussion, the impugned orders are set aside and the appeals are allowed with consequential relief, if any. - Decided against the revenue.

Summary

Issues:
1. Liability of appellants to pay Service Tax on 'Renting of Immovable Property Service'.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore involved the issue of whether the appellants, two units of Church of South India TA (CSI TA), were liable to pay Service Tax on 'Renting of Immovable Property Service'. The Hon'ble High Court of Karnataka had previously considered this issue in a writ petition filed by one of the appellants. The High Court held that the unit to whom the show cause notice was issued could not be considered a person, and since the property belonged to CSI TA, the proceedings should have been initiated against CSI TA and not against the units. Consequently, the Order-in-Original passed by the Commissioner was quashed. The Tribunal had also dismissed the appeal filed by one of the appellants as infructuous due to the quashing of the Order-in-Original.

The learned Chartered Accountant representing the appellants argued that the Orders-in-Original in the present case were invalid as the proceedings were initiated against the units, which were not legal entities but served as units of CSI TA. Given the similarity of facts to the case decided by the Tribunal and the decision of the High Court in the previous writ petition, it was deemed that the appeals could be decided finally without the requirement of pre-deposit. Therefore, the Tribunal considered the appeals for final decision and waived the pre-deposit requirement.

In light of the High Court's view that proceedings should have been initiated against CSI TA and not against the units for collecting Service Tax on 'Renting of Immovable Property Service', the proceedings initiated against the units were held as invalid. Consequently, the Orders-in-Original passed as a result of these proceedings were set aside. The impugned orders were thus set aside, and the appeals were allowed with any consequential relief. The stay petitions and appeals were disposed of accordingly.