2018 (10) TMI 2007 - HC - Service Tax

Levy of service tax for the period prior to 01.06.2007 - Airport Services - HELD THAT - This Court is of the opinion that since the question as to the correctness of the view expressed by the CESTAT on 02.01.2015 in the order impugned in these writ petitions is primarily the subject matter of appeal, the propriety requires that these writ proceedings should not be entertained. Undoubtedly, the CESTAT s approach in ignoring the decision of this Court is a matter of serious concern; as a tribunal being subordinate to and subject to the control of this court under Article 226, it was not expected to overlook or disregard the binding decision. Yet that circumstance alone cannot compel us to exercise discretion to entertain these writ proceedings given that the impugned order in these proceedings is primarily a subject matter of appeal before the Supreme Court. This Court is of the opinion that these writ petitions should not be entertained. It is open to the writ petitioners to seek appropriate remedy in accordance with law. The writ petitions are disposed of

Summary

Issues:
1. Challenge to the order of the CESTAT dated 02.01.2015 regarding the levy of service tax for activities at the Delhi Airport prior to 01.06.2007.
2. Interpretation of Section 65(105) (zzm) and Clause (zzzz) of the Finance Act in relation to letting out and renting out of airport premises.
3. Consideration of previous judgments, including Flemmingo Duty Free Shops Vs. Union of India and C.Sadanandan Vs. Airport Dir Airports Authority of India, regarding service tax levy on letting out of airport premises.
4. Impact of the Division Bench decision in Home Solutions Retails (India) Ltd. Vs. Union of India & Ors. on the retrospective amendment to Section 65(105)(zzm).
5. Allegation of the CESTAT ignoring binding rulings of the High Court and the approach to be taken in light of pending appeals before the Supreme Court.

Analysis:
1. The writ petitions challenged the CESTAT order of 02.01.2015, disputing the levy of service tax on activities at the Delhi Airport before 01.06.2007. The petitioners argued that prior to 01.06.2007, letting out and renting out of airport premises were not expressly subjected to service tax. The Service Tax Authority sought to tax such activities under "Airport Services" post the introduction of Section 65(105) (zzm) in 2004, with a subsequent amendment in 2007 (Clause (zzzz) of Section 65(105) of the Finance Act).
2. The petitioners relied on judgments like Flemmingo Duty Free Shops and C.Sadanandan, which held that letting out portions of airport premises did not attract service tax. The interpretation of Section 65(105) (zzm) and Clause (zzzz) of the Finance Act in this context was crucial to determining the tax liability.
3. The Division Bench decision in Home Solutions Retails (India) Ltd. led to a retrospective amendment to Section 65(105)(zzm) in 2010, prompting further judicial scrutiny. The petitioners contended that the CESTAT disregarded binding rulings of the High Court, including the Flemmingo case, necessitating intervention by the High Court.
4. Despite the CESTAT's disregard of previous High Court decisions, the High Court opined that since the matter was subject to appeal before the Supreme Court, the writ petitions should not be entertained. The court highlighted that the CESTAT's failure to consider binding decisions was concerning but did not warrant interference in the appeal process.
5. The High Court emphasized that the pendency of appeals before the Supreme Court, including those related to similar issues from other High Courts, precluded the need for intervention through writ proceedings. The petitioners were advised to seek appropriate remedies as per the law, and the writ petitions were disposed of accordingly.