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2022 (12) TMI 707 - HC - GSTReimbursement of GST Liability - Scope of the contract between the parties - HELD THAT - Having regard to the fact that by the introduction of GST, the provision of Finance Act, 1994, under which service tax was levied, has been subsumed into the GST, it is not open for the petitioner to contend that demand of GST by the respondents is a new levy/imposition that has been fastened by the respondents. Under the terms of Deed of Licence, since the petitioner had agreed to pay service tax in addition to the monthly licence fee fixed thereunder and the GST being a levy which has been introduced in the place of service tax, the petitioner cannot absolve herself of the liability to pay GST in place of service tax. The claim of the petitioner of her non-liability to pay GST on the licence fee is devoid of merit
Issues:
Challenge to levying GST on license fee under Deed of Licence Analysis: The petitioner filed a Writ Petition seeking a Writ of Mandamus to declare the respondents' action of levying GST on the license fee as illegal, arbitrary, and against natural justice principles. It was argued that the petitioner had obtained a license to operate a pop-corn stall at the respondent's premises by entering into a Deed of Licence, and the demand for GST was contrary to the terms of the agreement. The respondents contended that the petitioner had agreed to pay service tax on the monthly license fee as per the Deed of Licence, and with the introduction of GST replacing service tax, the demand for GST was justified. The Court noted the contentions of both parties and examined Clause 43 of the Deed of Licence, which mandated the payment of service tax. It was observed that the petitioner had been paying service tax along with the license fee without objection until the introduction of GST. The Court held that since GST replaced service tax, the petitioner was liable to pay GST as per the terms of the Deed of Licence. Therefore, the Court dismissed the Writ Petition, ruling that the petitioner's claim of non-liability to pay GST was without merit. The judgment concluded by dismissing the Writ Petition without any costs and directed the closure of pending miscellaneous petitions in light of the final order.
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