2015 (3) TMI 703 - HC - Service Tax

Demand of service tax - renting of immovable property - Service Tax Voluntary Compliance Encouragement Scheme 2013 - Held that - Issue has been settled by this Court in 2010 (11) TMI 32 - PUNJAB AND HARYANA HIGH COURT (M/s Shubh Timb Steels Limited v. Union of India and another) wherein it has been held that the provisions of Section 65(90a) and Section 65 (105) (zzzz) of the Finance Act, 1994 imposing service tax on renting of immovable property are not ultra vires the Constitution. It has further been held that giving of retrospective effect to the amendment effective from 1.6.2007 on which date levy was initially provided is also not bad. However, as regards prayer for deposit of service tax under the Service Tax Voluntary Compliance Encouragement Scheme 2013 is concerned, it shall be open for the petitioner to file representation to the appropriate authority at the first instance and claim benefit of the same, if available, in accordance with law. - Decided against assessee.

Summary

Issues:
Challenge to retrospective levy of service tax on renting of immovable property under Finance Act, 1994.

Analysis:
The petitioner sought to quash a notification, circular, and amended provisions of the Finance Act, 1994, regarding the retrospective levy of service tax on renting immovable property. The petitioner, a licensee running a chemist shop, contended that no services were provided by the licensor. The issue revolved around the imposition of service tax on rent, with the petitioner arguing against its applicability. The High Court noted the petitioner's challenge to the retrospective application of the amended provisions.

The High Court referred to a previous judgment where it was held that the provisions imposing service tax on renting immovable property were not ultra vires the Constitution. The Court also upheld the retrospective effect of the amendment from June 1, 2007. The petitioner's plea to deposit service tax under a voluntary compliance scheme was advised to be pursued by filing a representation to the appropriate authority. The Court found no merit in the writ petition and subsequently dismissed it.

In conclusion, the High Court dismissed the petition challenging the retrospective levy of service tax on renting immovable property under the Finance Act, 1994. The Court upheld the validity of the provisions and the retrospective application from June 1, 2007. The petitioner was advised to seek benefits under a voluntary compliance scheme by approaching the appropriate authority. The judgment clarified the legality of the amended provisions and their applicability to the petitioner's case, ultimately ruling against the petitioner's contentions.