HIGH COURT OF DELHI
Home Solutions Retails Ltd. & Others
v.
UOI
W. P. (C) 3398/2010
May 18, 2010
FACTS
In this writ petition there is a challenge to section 65(105)(zzzz) of the Finance Act, 1994 inasmuch as it purports to levy service tax on the renting of immovable property to be used for commercial / business purposes. This provision has been recently amended by the Finance Act, 2010 with retrospective effect from 1-6-2007.
HELD
Prima facie renting of immovable property itself has been regarded as a service by virtue of the recent amendment even though this Court by virtue of its decision on 18-4-2009 had categorically concluded that renting of immovable property by itself cannot be regarded as a service.
Issue notice. Notice is accepted by the counsel appearing on behalf of the respondent Nos. 1 and 3 and the counsel appearing on behalf of the respondent Nos. 2 and 4. Notice shall issue to respondent 5-10.
The respondents shall file the counter-affidavits within four weeks and the petitioner shall file the rejoinder/ affidavits thereto within two weeks thereafter. In the meanwhile, there shall be no recovery of service tax from the petitioner in respect of renting of immovable property alone. No such service tax would also be recovered from respondents 5-10 in the meanwhile.
It is made clear that in the event the writ petition is dismissed, the liability to pay service tax along with any other liability as a result of the demand made, will solely be that of the petitioner. We make it clear that there is no challenge in this writ petition to the second part of the aforesaid provision, namely, “any other service in relation to such renting” and consequently, if there is any other such service, the service provider would be liable to pay service tax on such service and in respect of this portion of the provision there is no stay.
CAclubindia
