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TMI BlogDelhi High Court has upheld the constitutional validity of Service Tax on renting of immovable property with retrospective effectX X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi High Court has upheld the constitutional validity of Service Tax on renting of immovable property with retrospective effect - Commentaries / Editorials Dated:- 23-9-2011 - News - Delhi High Court has upheld the constitutional validity of Service Tax on renting of immovable property with retrospective effect - www.taxmanagementindia.com In HOME SOLUTIONS RETAILS (INDIA) LTD. Versus UN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ION OF INDIA ORS (2011 -TMI - 205801 - DELHI HIGH COURT), honourable HC has held that: 68. When premises is taken for commercial purpose, it is basically to subserve the cause of facilitating commerce, business and promoting the same. Therefore, there can be no trace of doubt that an element of value addition is involved and once there is a value addition, there is an element of service. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69. In view of our aforesaid analysis, we are disposed to think that the imposition of service tax under Section 65(105)(zzzz) read with Section 66 is not a tax on land and building which is under Entry 49 of List II. What is being taxed is an activity, and the activity denotes the letting or leasing with a purpose, and the purpose is fundamentally for commercial or business purpose and its furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erance. The concept has to be read in conjunction. As we have explained that service tax is associated with value addition as evolved by the judgments of the Apex Court, the submission that the base of the said decisions cannot be taken away by a statutory amendment need not be adverted to. Once there is a value addition and the element of service is involved, in conceptual essentiality, service t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax gets attracted and the impost gets out of the purview of Entry 49 of List II of the Seventh Schedule of the Constitution and falls under the residuary entry, that is, Entry 97 of List I. 70. In view of our conclusion, the decision in the first Home Solution case does not lay down the law correctly inasmuch as in the said decision, it has been categorically laid down that even if a building/la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is let out for commercial or business purposes, there is no value addition. Being of this view, we overrule the said decision. 71. The next limb of attack is with regard to the retrospective applicability of the provision. The learned counsel for the petitioners have submitted that the tax and the penalty could not have been imposed with retrospective effect. It is worth noting that the Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liament, keeping in view the first Home Solution case, substituted sub-clause (zzzz) in the present incarnation and gave retrospective effect to cure the deficiency. It is well settled in law that it is open to the legislature to pass a legislation retrospectively and remove the base on which a judgment is delivered. For full text of decision please visit: HOME SOLUTIONS RETAILS (INDIA) LT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D. Versus UNION OF INDIA ORS (2011 -TMI - 205801 - DELHI HIGH COURT) Also see (Decision upholding the constitutional validity of service tax on renting): CINEMAX INDIA LIMITED THROUGH DIRECTOR Versus UNION OF INDIA THROUGH SECRETARY (2011 -TMI - 205321 - GUJARAT HIGH COURT) Retailers Association of India (RAI). Others Versus Union of India Ors. (2011 -TMI - 205187 - BOMBAY HI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GH COURT) Shubh Timb Steels Limited Versus Union of India and another (2010 -TMI - 78578 - PUNJAB AND HARYANA HIGH COURT) - News - Press release - PIB Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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