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<h1>Karnataka HC: Interim Order Bans Service Tax on Property Rent</h1> The Karnataka HC issued an interim order prohibiting the recovery of service tax solely for renting immovable property. The petitioner would be ... Interim stay on recovery of service tax for renting of immovable property - Scope of stay limited to renting of immovable property alone - Liability to pay preserved in event of dismissal - No stay for other taxable servicesInterim stay on recovery of service tax for renting of immovable property - Grant of interim order restraining recovery of service tax in respect of renting of immovable property alone. - HELD THAT: - The Court directed an interim order prohibiting recovery of service tax insofar as it relates solely to the service of renting of immovable property. The direction follows the petitioner's reliance on interim orders passed by Division Benches of other High Courts and is limited to stay of recovery pending disposal of the writ petition. The Court recorded appearance for the respondent and issued notice to the Central Government Standing Counsel before proceeding with the interim direction. [Paras 3]Interim restraint on recovery of service tax limited to renting of immovable property granted.Scope of stay limited to renting of immovable property alone - No stay for other taxable services - Liability to pay preserved in event of dismissal - Limitation of the interim order and preservation of the petitioner's liability if the petition is dismissed; no stay for services other than renting. - HELD THAT: - The Court clarified that the stay applies only to the service of renting of immovable property and does not extend to any other service. If the writ petition is ultimately dismissed, the petitioner alone will remain liable to pay the service tax and any consequential liabilities arising from the demand. Conversely, for any service distinct from renting, the service provider remains liable to pay service tax and no interim protection has been granted for such services. [Paras 3]Stay confined to renting-of-immovable-property service; no stay for other services; liability preserved in event of dismissal.Final Conclusion: An interim order restraining recovery of service tax is granted solely in respect of renting of immovable property; the stay does not cover other services and the petitioner remains liable to pay the tax and other consequences if the writ petition is dismissed. The Karnataka High Court directed an interim order stating no recovery of service tax for renting immovable property alone. Liability to pay service tax remains with the petitioner if the writ petition is dismissed. Service provider is liable to pay service tax for other services provided.
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