2016 (3) TMI 1052 - AT - Service Tax

Tribunal Upholds Service Tax on Renting Immovable Property Amid Legislative Changes

The Tribunal rejected the appellant's refund claim for service tax paid on immovable property during a specific period, citing retrospective taxation ... Allowability - Claim for refund of the tax paid as service tax on the renting of immovable property to them during the period 1.04.2008 to 31.03.2009 - Service tax paid on the premises rendered by them from the various landlords - Held that:- appeals of the appellant herein are devoid of merits as by notification no. 23/2007-ST dated 22.05.2007, the government of India section 125 to the Finance Act, 2007, services rendered under the category of renting of immovable property for the use of in course of furtherance of business and consumers was retrospectively taxed with effect from 1.6.2007. A challenge to constitutional validity of the same was dismissed by the Hon'ble High Court of Bombay in the case of Retailers Association of India [2011 (8) TMI 58 - BOMBAY HIGH COURT]. Therefore, in view of the above the appellant is not allowed to claim refund.- Decided against the appellant Issues:Refund claim of service tax paid on immovable property during a specific period.Analysis:The judgment pertains to four appeals filed by the same assessee, raising a common issue, and thus disposed of by a single order. Despite the absence of representation by the appellant, the Tribunal proceeded to address the matter based on the records. The central question revolved around whether the appellant's claim for a refund of service tax paid on immovable property during a specific period was valid. The appellant contended that service tax liability did not arise in renting of immovable property, citing a case from the Hon'ble High Court of Delhi. However, the government's notification retrospectively taxed services under the category of renting of immovable property from a certain date. The Hon'ble High Court of Bombay had already dismissed a challenge to the constitutional validity of this amendment.During the period in question, the appellant had paid service tax on premises from various landlords and subsequently sought a refund, arguing that the service tax liability did not apply to renting of immovable property. The Tribunal noted the retrospective taxation amendment by the government and the High Court of Bombay's decision upholding its validity. Consequently, the Tribunal found the appellant's appeals lacking in merit and rejected them, affirming the correctness of the impugned orders. The judgment underscores the impact of legislative amendments and judicial precedents on tax liabilities related to immovable property services, emphasizing the retrospective nature of the taxation provision and the legal validity upheld by the High Court.