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2021 Supreme(Mad) 1322
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ANITA SUMANTH, J.
M/s. Chennai Citi Centre Holdings, (P) Ltd., Represented by its authorized signatory, P.T. Shahul Hameed – Appellant
Versus
The Designated Committee under Sabka Vishwas Legacy Disputes Resolution Scheme, 2019, (Commissioner of GST & Central Excise), Chennai – Respondent
W.P. No. 3799 of 2021 & WMP. Nos. 4334 & 4335 of 2021
Decided on : 11-08-2021
Advocate Appeared:
For the Appellant :G. Natarajan, Advocate.
For the Respondents: Rajendran Raghavan, Senior Standing Counsel.
Headnote:
Constitution of India,1950 - Article 226 - Issuance of a Discharge Certificate - Service recipients that is, the lessors/landlords/assessee with their lessees/tenants - Burden of service tax- Assessees upon whom demands were raised had agreements with service recipients that is, the lessors/landlords/assessee with their lessees/tenants, that the burden of service tax would be borne by the latter - Private agreements provided that assessees would pass on the liability to their tenants and this was one of the defences taken by the assessee/landlords before the Service tax Department - In many instances challenge to the demands raised, including that to validity of the statutory provisions itself, was initiated at the instance of the tenant/lessee - are no materials placed on record by petitioner to indicate that similar orders have been passed in the case of petitioner’s lessees in the State of Tamil Nadu as well - This is one of the defenses raised by respondents in the counter, that there is no proof to the effect that the lessees of petitioner have effected remittances towards the service tax dues of petitioner – Held, Association of India have represented that in many cases, department has initiated proceedings against lessors from non-payment of service tax on rent on immovable property rented by their members. Hon’ble Supreme Court has allowed the lessees to file a Civil Appeal challenging the applicability of service tax in such matters, subject to the condition that they deposit appropriate pre-deposit as well as the remaining dues, if case is decided against them eventually - It is clarified that such persons are allowed to file a declaration under the Scheme and avail the benefits - impugned order suffers from lack of reasoning, and to set right this flaw, petitioner will appear before the respondent its case and also to provide proof of payment of tax by the lessees - It is made clear that respondent is fully at liberty to take a view in accordance with law as to the veracity or otherwise of the petitioner’s declaration and whether credit may be taken by petitioner, of payments effected by lessees (third parties) in regard to the declaration filed by the landlord - Circular issued by the Board will be taken note of and discussed in coming to a conclusion in the matter. If the respondent is so inclined to accept the petitioner’s contention qua adjustments of the remittances effected by the lessees - writ petition is disposed in
JUDGMENT :
(Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue Writ of Certiorarified Mandamus to quash FORM SVLDRS-3 No.L040320SV300070 (Declaration ARN No.LD0401200000237) dated 04.03.2020 and to further direct the respondent to issue a Discharge Certificate under FORM SVLDRS-4 by considering the payments made by the lessees against the Petitioner’s liability and as declared in FORM SVLDRS 1 vide Declaration No.ARN No.LD0401200000237.)
1. The petitioner has challenged an order passed by the sole respondent/the Designated Committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, (‘Scheme’), calling upon the petitioner to remit an amount of Rs.1.45 Crores (approx) as a pre-condition for issuance of a Discharge Certificate under the Scheme.
2. Heard Mr.G.Natarajan, learned counsel for the petitioner and Mr.Rajendran Raghavan, learned Senior Standing Counsel for the sole respondent.
3. The petitioner had approached the respondent with an Application under the Scheme for settlement of the dispute arising under show cause notice culminating in order-in-original dated 10.02.2017, confirming a demand of Service Tax under the Finance Act, 1994 (in short ‘Act’) for the period April 2008 to September 2011, under the head ‘Renting of Immovable Property Services’.
4. There was considerable litigation surrounding the levy of service tax under the above head. Many of the assessees upon whom demands were raised had agreements with the service recipients that is, the lessors/landlords/assessee with their lessees/tenants, that the burden of service tax would be borne by the latter. Thus, the private agreements provided that the assessees would pass on the liability to their tenants and this was one of the defences taken by the assessee/landlords before the Service tax Department. In many instances the challenge to the demands raised, including that to the validity of the statutory provisions itself, was initiated at the instance of the tenant/lessee.
5. The provisions of Finance Act, 1994 imposing service tax on rentals from immovable property were challenged and the challenge came to be dismissed by the Delhi High Court in the case of Home Solutions Retails (India) Ltd. V. Union of India and others (2009 (14) STR 433). In petition for Special leave, the Supreme Court directed the lessees to deposit a portion of the dues, upon condition that the balance would be remitted if the issue was held adverse to them. There are no materials placed on record by the petitioner to indicate that similar orders have been passed in the case of the petitioner’s lessees in the State of Tamil Nadu as well. This is one of the defenses raised by the respondents in the counter, that there is no proof to the effect that the lessees of the petitioner have effected remittances towards the service tax dues of the petitioner, or the quantification thereof.
6. Since, according to the petitioner, it is entitled to take credit of the amount that has been deposited thus far by its lessees, it adopted the stand that the amount payable by it under the scheme, that is 50% of the disputed demand should be taken to be remitted by way of adjustment of earlier remittances.
7. The application was filed on 04.01.2020 in Form SVLDRS –I. The respondent issued Form SVLDRS –II on 19.02.2020, computing the amount payable at a figure of Rs.1,55,92,131/- and calling upon the petitioner to remit the same. The Form stated that if the declarant i.e., the petitioner, did not concur with the amount estimated, he could appear for a personal hearing before the respondent on 21.02.2020 to explain its stand.
8. The petitioner appeared before the respondent and also filed written submission dated 28.02.2020 wherein it submitted that payments had already been effected by its lessees pursuant to an interim order passed by the Supreme Court, and such remittances may be given credit to in computing the payment required to be made by it under the Scheme
