2013 (4) TMI 122 - HC - Service Tax

Review petition Against the constitutional validity of Section 65(105)(zzzz)and Section 66 of the Finance Act, 1994 as amended by Finance Act, 2010 providing for levy of service tax on renting of immovable property service which is based on Full Bench decision of Delhi High Court in Home Solutions Retails (India) Ltd V. Union of India and others 2011 (9) TMI 46 - DELHI HIGH COURT - Special leave petition is filed against the said decision of Court. Held that - further interim orders, if any, issued by Honorable Supreme Court modifying the stay orders in the special leave petition pending against the judgment of Delhi High court in Home Solutions Retails (India) Ltd case (supra), will be applied in the case of all respondents. Review petitions are disposed of as above.

Summary

Issues:
Review of the constitutional validity of Section 65(105)(zzzz) and Section 66 of the Finance Act, 1994 regarding service tax on renting of immovable property service. Discrepancy in interim stay orders by the Supreme Court in related cases.

Analysis:
1. The High Court upheld the constitutional validity of the sections providing for the levy of service tax on renting of immovable property service. The judgment followed the Full Bench decision of the Delhi High Court in a similar case, thereby dismissing the review petitions challenging the statutory provisions.

2. The Supreme Court granted conditional stay orders in Special Leave Petitions against the Delhi High Court's decision, directing payment of service tax on renting of immovable property service from a specific date. The High Court stayed the collection of arrears of tax until a certain date, emphasizing that parties need not approach the Supreme Court against their judgment.

3. Review petitions were filed by the Department seeking modification of the judgment to align with a different conditional stay order passed by the Supreme Court in another case. Respondents in some cases opposed the review petitions, arguing against a stay order that contradicts the Supreme Court's interim orders in related matters.

4. After considering both sides, the High Court declined to allow the review petitions, stating they are bound to follow the Supreme Court's interim order in the pending Special Leave Petitions against the Delhi High Court's judgment. The Court emphasized the need to adhere to the Supreme Court's directives in similar cases.

5. The standing counsel for the review petitioners highlighted that the Supreme Court requested details about the demand in the pending Special Leave Petition, which were not provided by the parties. This lack of information was cited as the reason for the stay order not being modified in line with other cases.

6. The High Court disposed of the review petitions by clarifying that any further interim orders issued by the Supreme Court modifying the stay orders in the pending Special Leave Petitions against the Delhi High Court's judgment will be applicable to all respondents. The Department was authorized to recover the specified amount and enforce security conditions as directed by the Supreme Court. Respondents were instructed to comply with the Supreme Court's orders within a specified period, failing which the Department could recover the entire arrears of tax.

This detailed analysis of the judgment addresses the issues related to the constitutional validity of the service tax provisions and the discrepancies in the interim stay orders issued by the Supreme Court in similar cases.