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TMI Blog2023 (5) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of Chapter V of Finance Act No. 1994 - HELD THAT:- As could be seen from clause VI (1) of the lease agreement, it is specifically stated that rent was inclusive of municipal as well as other taxes as are assessed and levied without any reduction of income tax at source under Section 194-I. Thus, the rent was inclusive of the municipal and other taxes which are assessed and levied on only the property and there is no obligation on the landlord to pay the service tax which is a tax, which is admittedly not levied on the property - As could be seen from this clause also, the lessor i.e., the petitioner was obliged to pay all the rates, taxes, ground rent, assessments and the outgoings payable to the municipality or any other Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LIC is held liable to pay the service tax, the service tax paid by the petitioner shall be paid by the LIC to the petitioner within a period of one month from the date of receipt of a copy of this order - petition allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ched thereto (hereinafter called the said demised premises) and together with full right and liberty to the lessee to use in a reasonable manner wherever needed the stairs, passages, corridors and other areas with exclusive free access to the demised premises. The lessee has the full privilege to use bath rooms, toilets facilities etc of the said building as may be necessary for the full and proper enjoyment of the said demised premises and to have and to hold the said premises unto and to use the premises for a period of 10 years w.e.f. 18.11.2010. The date of occupation yielding and paying the rent as stipulated in clause-III of the agreement. The rent is inclusive of Municipal and all other taxes as are assessed and levied as on date wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay the taxes. However, admittedly, service tax is not a tax which is payable on the property, but is a tax payable on the value of the services availed. It is therefore clear that the clauses in the lease agreement would not entitle the LIC to contend that he would not be liable to pay the service tax. As already stated above, the terms of the clause merely indicate that the lessor, being the owner of the property, he would have to necessarily pay the taxes that has been assessed on the property. The terms of the lease did not provide for the landlord to pay the service tax which, as stated above, is a separate tax levied on the value of the services availed and not on the property. It is, therefore, clear that the endorsements i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay tax, is the service provider, namely the lessor." (emphasis supplied) 10. From the above extract, it is clear that though the person who provides the service, i.e., lessor, is liable to pay tax, he is entitled to pass on this liability to the recipient of the service. 11. In this view of the matter, it is the obligation of the lessor to collect the service tax and thereafter remit it to the Department. A lessee being the person who avails of service cannot deny his liability to pay the service tax, especially an instrumentality of the State i.e., to the LIC. This argument is therefore rejected. 12. It may also be pertinent to state here that it is not in dispute that since November 2017, LIC is, in fact, paying the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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