2008 (7) TMI 40 - HC - Service Tax

Service Tax on Renting of immovable property - In the event, demand of service tax being made under the provisions of Section 65(90a), Section 65(105) (zzzz) and section 66 of the Finance Act, 1994 as amended by Finance Act, 2007 in respect of the Petitioner s member s premises, such members of the Petitioners shall file undertaking in this Court stating that in the event the challenge is disallowed, they shall make payment of service tax

Summary

Issues:
Interim relief in relation to service tax demand under specific provisions of the Finance Act, 1994.

Analysis:
The High Court of Bombay, comprising D K Deshmukh & J P Devadhar, JJ, considered the matter where the respondents sought to transfer the case to the Hon'ble Supreme Court of India for hearing. Given that other High Courts had granted interim relief regarding the statutory provision in question, the Court decided not to proceed with the final hearing and issued an interim order to serve the ends of justice.

The Court directed that if a demand for service tax was made under certain provisions of the Finance Act, 1994, in relation to the premises of the Petitioners' members, those members must file an undertaking stating their commitment to pay the service tax if their challenge is disallowed. This undertaking was a condition to prevent coercive steps by the Respondent for recovery of service tax.

Furthermore, the Court stipulated that upon submitting the undertaking, the person involved could not transfer their interest in the property without providing a two-week prior notice to the Respondents. If objections were raised within this period, the transfer would require the Court's permission. However, if no objections were raised within two weeks, the person would be free to proceed with the proposed interest transfer.

In essence, the judgment aimed to balance the interests of both parties by ensuring that service tax demands were addressed, while also safeguarding the rights of the Petitioners' members in property transactions. The interim measures provided a framework for addressing the service tax issue until a final decision was reached, maintaining a fair and just approach in the proceedings.