2023 (4) TMI 80 - HC - Service Tax

Refund or adjustment of Service Tax - levy of GST (Service Tax) on collection of the market fee of Thirupathur Town Panchayat, or not - It is the case of the petitioner that he is not liable to pay GST in the light of entry No.39 of the Notification No.25/2012, Service Tax, dated 20.06.2012 issued by the Ministry of Finance, Government of India - HELD THAT - The Notification No.25/2012, Service Tax, dated 20.06.2012 and the subsequent circular amending the notification would indicate that the market fee is exempted from GST. Both the parties admitted that the above issue is pending adjudication. Therefore, considering the submission, the Writ Petition is disposed of with a direction that in the event of the adjudication coming in favour of the petitioner, i.e; if the market fee is exempted from GST, then the amount collected should be adjusted towards future payments. The representation of the petitioner shall be considered and disposed of by the respondents within a period of one month from the date of receipt of a copy of this order, in the light of the Notification No. 25/2012, Service Tax, dated 20.06.2012 and the circular No.13052/2016/D2 dated 03.05.2017 - Petition disposed off.

Summary

Issues involved:
The petition seeks a Mandamus directing the respondents to refund or adjust the GST paid by the petitioner for the years 2016-2020 for the collection of market fee of Thirupathur Town Panchayat.

Summary:

Issue 1: Interpretation of Exemption Notification
The petitioner argues exemption from GST based on entry No.39 of Notification No.25/2012, Service Tax, and a subsequent circular amending the notification to exempt market fee from service tax. The respondent contends that the petitioner is not exempt and highlights an audit objection regarding the collection of service tax since 2007-2008 when the annual rent/lease amount exceeded Rs.10,00,000.

Issue 2: Legal Standpoint on Payment and Adjustment
The Court notes that the issue of exemption is pending adjudication and directs that if the market fee is indeed exempted from GST, the collected amount should be adjusted towards future payments. The Court emphasizes that there is no provision for refund or adjustment of GST, and the representation of the petitioner should be considered and disposed of by the respondents within one month in accordance with the relevant notifications and circulars.

Conclusion:
The Court disposes of the writ petition with a direction for potential adjustment of the collected amount if the market fee is found to be exempt from GST. The decision is based on the interpretation of the exemption notification and the absence of a provision for refund or adjustment of GST.