2012 (11) TMI 613 - HC - Service Tax

Court Upholds Service Tax Levy, Orders Payment to Third Party

The Court upheld the constitutional validity of the service tax levy imposed by the landlord. The petitioner complied with the interim order to deposit ... Status after upholding of Constitutional validity of levy of Service Tax - Renting of Immovable Property - the amount available in deposit with the 8th respondent Bank to be paid over to the 6th respondent (Department) - Following the decision of court in case of [Retailers Association of India V. Union of India 2011 (8) TMI 58 - BOMBAY HIGH COURT]held that:- Writ petition is disposed of directing the 8th respondent to verify the relevant records, ascertain the exact amount deposited by the petitioner and thereupon, the amount along with the accruals thereon should be paid over to the 6th respondent. This the 8th respondent shall do as expeditiously as possible and at any rate within 4 weeks from today. Issues:1. Challenge to the constitutional validity of service tax levy.2. Compliance with interim order for depositing service tax amount.3. Upholding of levy by Division Bench of Delhi High Court and Bombay High Court.4. Petitioner's request for payment of deposited amount to another party.5. Relief sought through a writ petition for payment of deposited amount.Analysis:1. The petitioner challenged the constitutional validity of a service tax levy imposed by the 4th respondent landlord for services provided. The High Court issued an interim order directing the petitioner to deposit the service tax amount in a separate bank account with a lien in favor of the 4th respondent until the writ petition is disposed of.2. The petitioner complied with the interim order by depositing Rs.9,70,775 in the 8th respondent bank. Subsequently, the Division Benches of the Delhi High Court and Bombay High Court upheld the constitutional validity of the levy. A judgment by a Division Bench of the High Court upheld the levy, subject to pending appeals before the Apex Court.3. The petitioner sought payment of the deposited amount to the 6th respondent following the validation of the levy. The petitioner requested a writ of mandamus or appropriate order directing the 8th respondent to close fixed deposit accounts and pay the specified amount to the 6th respondent.4. Considering the compliance with the interim order, the upheld levy, and the pending appeal before the Apex Court, the Court granted the relief sought by the petitioner. The Court directed the 8th respondent to verify the deposited amount and pay it along with accruals to the 6th respondent promptly, within 4 weeks from the judgment date.