2014 (8) TMI 553 - AT - Service Tax

Waiver of pre deposit - Renting of Immovable Property - Held that - according to the applicant, prima facie, there is a dispute of levy of tax on market fees, bus fees etc under the category of Renting of immovable property . However, there is no dispute regarding liability of tax of about ₹ 65 lakhs as per the submission of Ld. Advocate. In view of that, respectfully following the decision of Hon ble Supreme Court as mentioned above, the applicant is directed to make a predeposit of ₹ 65,00,000/- - stay granted partly.

Summary

Issues:
1. Liability of municipality vs. Corporation for service tax demand.
2. Barred by limitation and intention to evade payment.
3. Dispute regarding levy of tax on "Renting of Immovable Property."
4. Direction to deposit entire amount of tax.
5. Maintainability of tax demand on various fees.
6. Predeposit amount and waiver of balance tax, interest, and penalty.

Analysis:
1. The judgment dealt with the issue of liability for service tax demand between a municipality and a corporation. The counsel argued that as the applicant was declared a corporation in October 2011, the liability of the municipality during the mentioned period cannot be shifted to the corporation. The demand was challenged on the grounds of limitation and lack of intention to evade payment.

2. The dispute also involved the levy of tax on "Renting of Immovable Property," citing a decision by the Hon'ble Delhi High Court in a similar case. The counsel highlighted that the Hon'ble Supreme Court had stayed recovery proceedings in a related case, indicating a broader national dispute on the tax issue.

3. The Revenue's argument focused on a subsequent judgment by the Hon'ble Supreme Court directing assesses to deposit entire dues in installments. The Revenue contended that the applicants should be directed to deposit the full tax amount, emphasizing the importance of compliance with the court's directives.

4. The Tribunal, after considering both sides' submissions and relevant legal precedents, directed the applicant to make a predeposit of a specific amount within a set timeframe. The predeposit amount was determined based on the uncontested liability of around &8377; 65 lakhs, which was deemed sustainable under the category of "Renting of Immovable Property."

5. The judgment also addressed the maintainability of tax demands on various fees like parking fees, market fees, bus fees, slaughterhouse fees, and fisheries fees. The counsel acknowledged the potential sustainability of tax demands on rent from buildings and shopping complexes but contested the demands on other fees.

6. In conclusion, the Tribunal ordered the predeposit of &8377; 65,00,000/- to be made within 8 weeks, with the waiver of the balance tax, interest, and penalty contingent upon this predeposit. The recovery of the remaining amount was stayed pending the appeal's disposal, emphasizing compliance reporting on a specified date.

Overall, the judgment provided a detailed analysis of the legal issues surrounding the service tax demand, liability allocation, dispute resolution, and compliance requirements, ensuring a fair and balanced approach to the case.