2013 (4) TMI 214 - HC - Service Tax

Liability of pay service tax rending - Tenant (leasee) paid the service tax in pursuance of the direction of the court in the matter of writ petition challenging the constitutional validity - adjustment of service tax with the service tax demanded from the landlord - held that - Admittedly the amount was remitted by the petitioner with the 8th respondent for payment of service tax due from the 4th respondent. Now that the liability has been upheld by the Courts, petitioner wants to discharge the said liability and it is therefore, that the prayer is now made. Thus dispose of this writ petition directing the 8th respondent to ascertain the exact amount deposited by the petitioner and there upon the amount, along with accruals thereon should be paid over to the 6th respondent within four weeks from today.

Summary

Issues:
1. Challenge to the constitutional validity of service tax levy.
2. Payment of service tax on leased premises.
3. Direction for payment of deposited amount to the tax authority.

Analysis:
1. The petitioner challenged the constitutional validity of the levy of service tax in a previous writ petition. They had deposited the amount equivalent to the service tax payable at the bank, noting lien in favor of the tax authority. The demand for payment of service tax was raised on the landlord, prompting the petitioner to file a writ petition seeking direction for payment from the deposited amount.

2. The petitioner, who had taken a premises on lease from the landlord, argued that as per their agreement, they were liable to pay the service tax demanded from the landlord. The petitioner had already remitted the amount with the bank for the payment of service tax due from the landlord. With the liability being upheld by the courts, the petitioner sought to discharge the said liability through the deposited amount.

3. The court, after considering the circumstances, found no reason to decline the petitioner's prayer. The writ petition was disposed of with a direction to the bank to ascertain the exact amount deposited by the petitioner. Subsequently, the bank was instructed to pay the deposited amount, along with any accruals, to the tax authority within four weeks from the date of the judgment, emphasizing expeditious compliance with the directive.