2022 (5) TMI 572 - HC - Service Tax

Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 - levy of service tax on Renting of Immovable Property Services - Circular No.1073/06/2019.CX dated 29th October 2019 - HELD THAT - The circular clarifies that the Retailer Association of India has represented that the department has initiated proceedings against lessors for non-payment of service tax on rent over immovable property rented by the members - It is further clarified in the aforesaid circular that such members are allowed to file declaration under the Scheme and avail the benefits. The petitioner/lessor has filed appeal before the Apex Court. The said circular is clarificatory in nature. Needless to state that the petitioner is required to comply with all the conditions under the Scheme for availing the benefit of the said scheme. Respondents shall reconsider the declaration of the petitioner and shall not reject it on the ground upon which impugned order is passed. Writ petition is disposed of.

Summary

Issues:
1. Rejection of declaration under Sabka Vishwas Scheme 2019.
2. Eligibility of the petitioner to apply under the Scheme.
3. Interpretation of Circular No. 1073/06/2019.CX regarding service tax on immovable property.

Analysis:
1. The writ petition challenged the rejection of the petitioner's declaration under the Sabka Vishwas Scheme 2019. The petitioner, a member of the Retailers Association of India (RAI), had filed a writ petition questioning the service tax on "Renting of Immovable Property Services." The Apex Court granted interim relief, directing the petitioner to deposit 50% of the arrears towards the tax and file an undertaking. The rejection was based on the appeal not being pursuant to the show cause notice issued by the Department.

2. The petitioner argued that as per Circular No. 1073/06/2019.CX, they should be eligible to apply under the Scheme. The respondents contended that the petitioner was not served with a show-cause notice and that the appeal before the Apex Court was not related to the notice. It was highlighted that the service provider, not the service recipient, is liable for the service tax.

3. The Court considered the circular, which mentioned that the Retailers Association of India had represented cases where the department initiated proceedings against lessors for non-payment of service tax on rented immovable property. The Apex Court allowed lessees to file appeals subject to certain conditions. The circular clarified that such members could file declarations under the Scheme and avail benefits, provided they comply with all conditions. The Court held that the circular was binding on the respondents, and the rejection of the petitioner's declaration was set aside.

In conclusion, the Court directed the respondents to reconsider the petitioner's declaration without basing the decision on the previously rejected grounds. The petitioner was reminded to fulfill all conditions under the Scheme to benefit from it. The writ petition was disposed of without costs.