2019 (6) TMI 385 - HC - Service Tax

Classification of Renting as Service Tax upheld by Court

The Court dismissed the writ petition challenging the classification of 'Renting of immovable property' as a declared service under Service Tax ... Vires of provision “Renting of immovable property”, as defined under Section 65 (90a) read with Section 65 (105) (zzzz) as 'Declared Service', under Section 66 E (a) read with 65 B (22) - HELD THAT:- Declaration sought for in the instant writ petition cannot be granted, in view of a decision of the Hon'ble Division Bench, in GV. MATHESWARAN VERSUS THE UNION OF INDIA AND OTHERS [2015 (3) TMI 391 - MADRAS HIGH COURT], wherein this Court, has dismissed the writ petition filed for the same relief. Request of the learned counsel for the petitioner to keep the instant writ petition pending, till a decision is arrived at by the larger Bench also cannot be countenanced, for the reason that only leave has been granted by the Hon'ble Supreme Court. Order made in G. V. Matheswaran (supra), has not been stayed by the Hon'ble Supreme Court. Law as on today is that the provision has been upheld and therefore, respondents should be allowed to act, as per the existing provision. Petition dismissed. Issues:Challenge to the classification of 'Renting of immovable property' as a declared service under Service Tax provisions.Analysis:The petitioner sought a declaration that the classification of 'Renting of immovable property' as a declared service under Service Tax provisions was illegal, ultra vires, and unconstitutional. The argument was based on the contention that the provision exceeded the legislative competence of the Parliament and should be struck down. The petitioner aimed to bring this service under the definition of 'Service' for the purpose of charging Service Tax.The Court noted that a similar matter had been previously adjudicated by a Division Bench in the case of G.V. Matheswaran Vs. Union of India {2015 (37) STR – 881 – Madras}, where the writ petition for the same relief was dismissed. The petitioner's request to keep the instant writ petition pending until a decision by a larger Bench of the Supreme Court was also rejected. The Court emphasized that the provision had been upheld in the previous case, and there was no stay order by the Supreme Court. Therefore, the respondents were directed to act in accordance with the existing provision. Consequently, the Court dismissed the writ petition, stating that the law as it stands today upholds the classification of 'Renting of immovable property' as a declared service under the Service Tax provisions.In conclusion, the Court refused to entertain the writ petition challenging the classification of 'Renting of immovable property' as a declared service under the Service Tax provisions. The decision was based on the precedent set by a previous case where a similar relief was denied. The Court emphasized that since there was no stay order by the Supreme Court on the existing provision, the respondents were required to adhere to the current legal framework. Therefore, the petition was dismissed, and no costs were imposed, with the connected Miscellaneous Petitions being closed as a result of the judgment.